Testimonials

Mr. Ivon Hughes has provided me with outstanding service and counsel in helping to identify and obtain the appropriate type and amount of life insurance to suit my financial needs and family circumstances.
- T. Finkel, ON

I would just like to take this moment thank you for the exceptional service you have provided me and my husband. You have proven to be efficient and always available to deal with issues or answer question. Thank you once again.
- V. & R. Davis, ON

I can state that my association with Mr. Hughes and his company, Hughes Trustco, has been most satisfactory both as a supplier of services and as a client.
- J. Clark, PQ

I am pleased to say that 15 years later, my insurance needs are still met with the same interest and attention as they were in 1989!
- L. Riddell, PQ

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CRITICAL ILLNESS INSURANCE ARTICLES

Critical Illness

Critical Illness Insurance is Critical
Diagnosis of a critical illness can create financial and emotional strain on individuals, families, and even business owners. It is difficult to predict who might be affected, but with a well-crafted financial plan, which includes critical illness insurance, your client and their loved ones can be protected from these unexpected costs.

Statistics reveal that more and more people will be affected by a critical illness at a younger and younger age. Consider the following facts:

• 1 in 4 will develop heart disease during their lifetime
• 1 out of 2 heart attack victims are under 65 years of age
• 75% of victims survive a first stroke
• 1 out of 3 people will develop some form of cancer during their lifetime
• 1 woman out of 9 will develop breast cancer during her lifetime
• 1 man out of 8 will develop prostate cancer during his lifetime
• over 500,000 suffer from multiple sclerosis, one of the highest rates in the world
• nearly 10 million people could suffer from Alzheimer’s disease between now and 2031.

Source Statistics: Canadian Cancer Society, Heart & Stroke Foundation of Canada, Multiple Sclerosis Society of Canada, Alzheimer’s Society of Canada and other sources.

A new form of health insurance was introduced to assist clients who are diagnosed with a major illness. Critical illness insurance is designed for individuals who wish to protect themselves from the financial worries that may result from a serious illness or major medical condition.The benefits provided by critical illness insurance can fill the financial gap that is often created between health insurance plans and the substantial expenditures that can result from a serious illness.This type of support can help tremendously in maintaining quality of life and financial security during the recovery period, allowing
family members to focus on the loved one getting well, not on medical expenses or other related costs.

Critical Illness Pays
Critical illness insurance pays clients a lump sum if they survive 30 days following diagnosis of any one of 21 listed critical illnesses. The client can use the payment in any way they choose. A critical illness plan can provide clients with additional resources to pay the costs of specialized medical treatments, obtain home nursing care, pay child care expenses, cover unpaid medical expenses, allow the client to take a leave of absence, pay off their mortgage or other large financial obligations, allow a spouse to take a leave without pay to be with their loved one during the course of medical treatment, or provide the time the
client needs to adjust their lifestyle. A critical illness plan can eliminate financial worries enabling the client to focus on recovering from their illness.

Who Buys Critical Illness Insurance?
Critical illness insurance may be suitable for a wide range of clients. Clients may be particularly concerned if they are just starting out, have limited resources, or if they have dependents. In addition, clients who are now getting their financial and retirement or investment plans on the right track could face serious setbacks should the unexpected expense of a critical illness arise.

Critical illness is available for individuals up to 64 years of age.However, clients with a personal or family history of cancer, heart attack, stroke, diabetes and other critical illnesses may not qualify for coverage.

Critical Illness Insurance Typical Costs
What does Critical Illness Insurance Cost?
• Ricky is age 41 and Lucy is age 42
• They earn a combined $80,000 per year
• They both work as supervisors for a medium sized firm that offers a comprehensive benefit plan
• They have two children, Jimmy and Amy aged 10 and 8
• Their home is worth $250,000 and they have $100,000 remaining on the mortgage
• They have combined RRSPs worth $75,000 and $20,000 in RESPs for the children

Critical Illness Will Protect Older Family Members
Ricky and Lucy are currently preparing their home to accommodate Lucy’s mom, Alice. Alice, now 73, recently had a mild stroke and is showing early signs of Alzheimer’s. Alice lives about 10 miles away and the daily travel to look in on her has become too much for Lucy to handle.They understand that caring for an infirm loved one is upsetting and can be expensive.They are concerned that if either of them suffered a critical illness it could be both emotionally and financially crippling.They do not want to have to re-mortgage their home or use RRSP assets should they suffer a major illness.

Cost of Critical Illness Insurance
After discussing possible financial requirements to meet medical needs, financial obligations, and adapting to a new lifestyle, Ricky and Lucy settle on a policy for $100,000 on each of their lives.This will allow them to pay off the remaining mortgage balance – although they have complete discretion and can use the insurance payment any way they choose.

The clients have three alternatives: a term 10 plan with guaranteed right of renewal to age 75 (at guaranteed rates), a level term to 75 plan and a level term to 75 plan with return of premium:

Initial monthly premiums for $100,000 of critical illness coverage:

Ricky Lucy

Term 10 (yrs 1-10) 53.23 49.23

Term to 75 93.15 80.46

Term to 75 with Return of Premium 107.01 98.19

Term 10 rates will increase at the end of each 10 year period.The renewal rates are guaranteed in the contract.

Total cost to age 75 - summing up the total monthly premiums the clients will pay if they keep the coverage and do not make a claim up to age 75:

Ricky Lucy

Term 10 65,257.92 45,625.68

Term to 75 38,005.20 32,020.56

Term to 75 with Return of Premium 43,660.08 38,883.24

Under the Term to 75 with Return of Premium, assuming neither client makes a claim, Ricky will receive a refund of $43,660.08 on the termination of the policy at age 75 and Lucy will receive a refund of $38,883.24 when her policy terminates at age 75.

The client chooses Term 75 with Return of Premium.They like the idea that if they make a claim they will receive a large insurance pay-out, but they will receive all of their money back if they do not make a claim.They choose NL CI from National Life because:

• The price is competitive
• Your SaveTax website made is easy to understand how Critical Illness plans work
• They found the needs calculator helped them make decisions about the coverage
• The plan covers 21 illnesses including four major illnesses
• The definitions were easy for the average person to understand
• NL CI includes Best Doctors Services® at no extra charge

This example is a summary and is not complete without a Critical Illness insurance projection to explain the product features and limitations.This case study is based on NL Projection Software version 2004.02.02

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Ivon T. Hughes, The Hughes Trustco Group Ltd.
Online Insurance Broker - Get a FREE Quote TODAY!
Tel: (514) 842-9001 Email: [email protected] Web: http://www.trustco.ca
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