By Sheila Walkington, Co-Founder and CFO Money Coaches Canada, Co-Founder Women’s Financial Learning Centre

Names and minor details have been changed to protect privacy.

Most Canadians recognize the importance of making plans for their future, creating a nest egg through RSPs, TFSAs, company pensions, real estate and other investments, but as the saying goes; Life is what happens to you while you’re busy making other plans. What would happen to your nest egg if life threw you a curve ball, such as an accident or illness?

Insurance is one of those topics that many people avoid talking or even thinking about. There are so many different types of policies that it can easily become overwhelming to sort out what you need and what you don’t need. It’s not uncommon for people to opt into a group plan at work and then tuck the benefits booklet into a filing cabinet without really understanding the coverage they have. But when it comes to insurance the more you know, the better you can find a product that suits your situation and protects your future.

The two most common insurance products are Life Insurance (either Term Insurance or Whole Life/Universal Insurance) and Disability Insurance. A third insurance, Critical Illness, is newer in Canada and unlike disability insurance, which is linked to your ability to work and paid-out over time, Critical Illness insurance pays out in full usually 30 days after your diagnosis.

A financial settlement from insurance can take a lot of stress off a bad situation

The death of a spouse, an illness that keeps you from working, high medical bills from a life threatening illness; when times are tough, no one needs financial stress as well. Money doesn’t take away our problems, but it can sure make things a little easier at times. Disability will cover bills if you can’t work, life insurance can pay off the mortgage or debt or cover education costs if a spouse dies, and critical illness can be used to cover medical bills or to hire some help if you are sick.

I recently had a discussion about insurance with Glennis Deslippe, who has been a living benefits specialist with Integral Financial Services Inc. for the last 12 years. Continue reading →