Listen to this Podcast
Protect Your RRSP with Critical Illness Insurance
Now that RRSP season is here, Canadians across the country are making their contribution plans before the March 1st deadline.
But how protected are their RRSP savings from unforeseen circumstances, such as critical illness?
In the unfortunate event that you develop an illness that requires long-term treatment and recovery, and don’t have sufficient insurance coverage, you might be tempted to dip into your RRSP to access funds to cover basic household expenses. Withdrawing from your RRSP could potentially cost you hundreds of thousands of dollars in the long term.
This is also true if you’re a self-employed business owner. Should you be struck with sudden illness, you’ll need coverage to not only keep your business operating, but also to cover your personal and family expenses.
This is why our advisors recommend critical illness insurance as a safety net to protect you and your family’s financial future. Consider this scenario:
- If you withdrew $150,000 from your RRSP, you’d be put into a higher tax bracket when added to other earnings
- At a nominal 46% tax rate, you would only net $81,000 of the $150,000 that was in your RRSP
- With critical illness insurance, you could leave that $150,000 in your RRSP, which compounded at 6% over 20 years would have grown to $481,070
Critical illness insurance plans are completely customizable to your personal needs and current situation, and cover illnesses such as some types of cancer, heart attacks, and stroke. Some policies also cover major organ transplant, Parkinson’s disease, deafness, traumatic head injury, and loss of independence. Optional add-on illnesses are also available.
You would receive a lump sum, tax-free payment upon diagnosis of a covered condition or illness. You can use this payment how you choose and have the flexibility to cover expenses from:
- Medical treatment or equipment that are not covered elsewhere
- Alternative medical care offered locally or out-of-country
- Caregivers to take you to therapy sessions
- In-home care providers
- Personal and corporate debt, including taxes
- Hire a replacement for your role at work (for business owners)
- Meet your corporate payroll (for business owners)
You’ve worked hard to build up your savings. With critical illness insurance, knowing that your expenses are covered and savings are protected means that you can concentrate fully on your recovery.
After all, your health is your wealth!
To learn more about what critical illness insurance can do to protect your family, business, and investments, call your financial advisor today, or schedule a free,15-minute consultation with one of our advisors!
We’d love to hear from you!
We hope you enjoyed reading our blog post. If you want to keep up with the latest financial news and retirement tips, subscribe to our newsletter, follow us on our Instagram, Twitter, Linkedin and Facebook accounts (@jackieportercfp) and keep up with our News Blog.
More Financial News & Events
Unique financial challenges female lawyers face
Mar
Taking Action: A Woman’s Perspective on Deciding To Tackle Her Finances
Mar
Is there a gap in your income protection?
Mar
Knowing the difference between Tax Filer and Tax Advisor
Mar
Conquering Women’s Fears Around Finances
Mar
Trends in Family Law
Feb
PART 2: Financial Conversations Couples Need To Have at Different Life Stages
Feb
Financial Conversations Couples Need To Have at Different Life Stages
Feb
Disruption and Reinvention: Starting a Second Career in your Forties
Jan
How to create a strong financial fortress during market downturns
Jan
Creating a Financial Vision Board for 2023
Jan
5 Tips to set yourself up For Financial Success in 2023
Jan
Year-end Donation strategies
Dec
Year-end tax planning
Dec
Getting clients organized for 2023
Combating Quiet Spending
Nov
Our Client’s Journey to Building Financial Confidence
Nov
How Working with an Advisor can Improve your Confidence
Nov
A letter from the CEO’s desk
Nov
Getting Psychologically Ready for Retirement
Oct
Retirement Planning for Business Owners
Oct
Top Issues Clients Face with Retirement
Oct
What Risk Means for your Investment Portfolio
Oct
Finding Investment Opportunities in the Market
Sep
Behind The Scenes On Helping Our Clients Choose Investments
Sep
How to Deal with Debts Amidst Rising Costs
Sep
Buying and Selling Homes as Prices Fall
Aug
Parenting and Back to School
Aug
Dealing with the high cost of living
Aug
Ask Team Jackie Porter Series – Financial Planning with Jin Lee
Aug
Budgeting for Home Renovations
Jul
Mental Health and Finances
Jul
Planning a Vacation Post Covid
Jul
Dealing with spending pressures
Jun
Behind the Scenes – Working with Lawyers on a Financial Plan
Jun
Positive Experience with Financial Planning – A conversation with Erin Leslie
May
What Are the Process of Putting Together a Financial Plan? – A conversation between Jackie and Jin
May
Creating Financial Transformations
May
Building A Brand Effectively in Second Quarter – A Conversation with Cassie Drake
May
How to boost your business mojo – A conversation with Valeri Hall Little
Apr
How to make a financial fresh start second quarter? 5 principles from Jackie Porter
Apr
The #1 Challenge that Leaders Face, from the Founder of Green Apple Consulting – Lisa Mitchell
Apr
What is entrepreneur resilience? A conversation with Karen Dean
Mar
Barriers that Women Face to Access Healthcare – A conversation with Sara Byrnell
Mar
Six Action Steps You Can Take To Build Your Financial Confidence
Mar
How do we build lasting relationships and what leads to the honeymoon being over? A conversation with Gary Direnfeld
Mar
Re-visiting the Wedding Ritual in 2022
Feb
What Does a Private Investigator Know About Love, Money & Relationships
Feb
Myth-Busters: Everything Small Businesses Should Know About Funding
Jan
Slay Your Impostor Syndome
Jan