Cancer survivor reveals why, “it is worthwhile to have insurance” April, 2011
Karen Timchuk is a critical illness insurance policyholder who, when faced with a critical illness, was able to keep her retirement plans on track. This is her story.2
In late 2009, only a few years after purchasing her policy, Karen suffered sudden back and abdominal pain which, when investigated, revealed both non-Hodgkin’s lymphoma and colon cancer. “Needless to say, December was dark and gloomy for me,” Karen says. “The fact I was going to get $100,000 was the only good news I got that month.”
Karen used the funds to cover the cost of chemotherapy-related drugs not covered by her health plan, take a holiday with her spouse in between chemotherapy treatments and keep up her pension plan contributions.
“I was on long-term disability from my job and had to pay over $10,000 into my pension for the 11 months I was off,” she explains. “My plan is to retire in 2014. If I couldn’t afford the pension contribution, I wouldn’t be able to retire on schedule.”
Karen also had some concerns knowing non-Hodgkin’s lymphoma can recur. But the benefit amount she purchased allowed her to set aside some funds as a security blanket in case of a relapse.
Karen says she is thankful she made the decision to go with the insurance. As her parents both had a history of cancer, her policy was rated. “The premium was around $50 a month more with the rating,” says Karen. At that time, I was in my early forties and felt invincible,” she says. “But even with the rating, I still felt it was a good deal for me. I’m a believer and tell everyone it is worthwhile to have insurance.”
It’s important to remind ourselves that serious health problems can strike any of us at any time. Unforeseen events can derail your carefully thought-out retirement plans and have a devastating impact on your family finances.
Imagine having to dip into your registered retirement savings plan (RRSP) savings or cease contributions to make mortgage payments and pay for drugs. Situations like these not only expose you to greater taxes, but can also short-change your retirement nest egg.
Planning for the future involves more than just saving money; it involves planning for the unexpected.
I can provide more details on this important piece of a comprehensive financial security plan.
2The information and views expressed are solely those of the individual represented but may have been edited for brevity.
Periods after weak markets, a good time to invest
Market volatility is neither new nor unusual. If you’re concerned about recent market behaviour, remember markets typically recover from downturns and go on to post positive overall returns.
Consider this: As of December 2010, the TSX posted a one-year increase of 13 per cent. The S&P 500 increased nine per cent over the same period1. These increases are consistent with the story history tells us: in periods after a weak market, markets have tended to offer above-average returns.
Taking action sooner rather than later can help position you to benefit from this trend.
How will you be invested?
While being hesitant about getting back into the market is a normal reaction, sitting on the sidelines can mean you could miss key periods of market appreciation — periods that can make the difference between reaching your investment goals or falling short.
If you’re uneasy about investing, here are a few things to consider.
Maintaining a long-term view and being properly diversified are two key principles for managing volatility.
Diversification can be easy to achieve. A well-diversified portfolio that is matched to your risk tolerance is something, I can help you put in place.
Select the right investment
Segregated fund polices offer several features that can help protect you from the potential risks associated with investing. I can help you determine whether insurance-based investment vehicles such as segregated fund policies are appropriate for you.
Build the right portfolio
I have access to investment tools that can help you determine the right mix of investments for your investment portfolio. I can help you make sure these decisions are based on your unique situation and your risk tolerance.
Get financial security advice regularly
It’s important to remember your risk tolerance may change over time, so maintaining contact with your financial security advisor is important. This will ensure you have the current information and advice about how to structure your portfolio to reflect your risk tolerance.
Whether you’re in the savings phase of your retirement plan or drawing an income, I can work with you to review your plan and, if appropriate, determine if there are opportunities for you to reinvest in it.
1Source: Fun capital market facts, The Globe and Mail, Dec. 10, 2010.
A description of the key features of the segregated fund policy is contained in the information folder.
Any amount that is allocated to a segregated fund is invested at the risk of the policy owner and may increase or decrease in value.