Faced with that choice, most people wouldn’t hesitate to mortgage the future to survive today. But shouldn’t there be a way to take care of both your life now and your financial security tomorrow: There is. It’s a Critical Illness Recovery Plan, and it can be used to secure your RRSP and your future when you face the enormous financial demands that often accompany catastrophic illnesses such as heart attack, stroke, and cancer.

Medical expenses deplete RRSP

Risking the future to survive today. That’s effectively what an individual would be doing if the decision was made to cash out even a portion of an RRSP to pay for a medical procedure that was only available in the U.S. when it was needed the most.

The numbers tell the story. If you were diagnosed with a cancer that threatens your life, you might find that the therapy you require is available right now in the U.S. at a cost of $50,000 (U.S.). Anxious to get treatment, you opt for the out-of-country medical care, and you turn to your RRSP savings. That $50,000 in American dollars you need converts to $75,000 in Canadian funds. And then there are the tax implications that go along with early RRSP withdrawals. Assuming a 40 per cent tax rate, you’ll have to take out $125,000 to net the cash required to pay for those American medical services

And what’s the long-term impact of that withdrawal on your RRSP? For a 45 year old routinely making $10,000 RRSP contributions annually and assuming an 8 percent annual return, the long term effect of that $125,000 withdrawal is not just the cashed-out amount itself: it is also the money not earned in retirement savings as the RRSP rolls forward each year without that amount. By age 65, you would see that the $125,000 withdrawal represents a staggering difference of $582,620 in savings no longer.

Critical Illness a better option than RRSP!

For less than $70 a month, a 40 year old male non-smoker could purchase a $75,000 Critical Illness Recovery Plan policy that would provide the cash for that life-saving medical treatment without compromising the future security promised by his RRSP. Benefit options are available ranging from $10,000 to $1 million.

The chances are better than ever today that if you suffer a critical illness, you will survive it. So while you should be confident that your life will go on, you should take steps to make sure your financial security does as well. Critical Illness Recovery Plans provide the cash to deal with the unexpected expenses that result from catastrophic illnesses. It offers a lump-sum benefit when individuals are diagnosed with or, in some cases, require surgery for any of the following: cancer, heart attack, stroke, Alzheimer’s disease, multiple sclerosis, Parkinson’s disease, coronary artery bypass surgery, major organ transplant, blindness, deafness, loss of speech, paralysis/loss of limbs, coma, renal (kidney) failure, severe burns, occupational HIV infection or motor neuron disease and they survive the waiting period.

Because there are no restrictions on how the full cash benefit can be used, critical illness insurance is ideal for accessing quick and expert medical service available in other countries, including the U.S. This year, more Canadians than ever will survive near-fatal illnesses.

Email or call us today to find out how you and your family could benefit from a Critical Illness Recovery Plan.