Preparing for Fallout: Disability, Critical Illness, and Life Insurance

Even if you’re not an avid air traveler (thanks, COVID), you likely know what they say when it comes to how to act in an emergency: always put your own mask on first. You’re better off putting your own mask on first so you’re best able to focus on helping others who may need your assistance. This analogy is used a lot when it comes to self-care and health, and I think it’s pretty much spot on.

You pour your heart into a business – build it from the ground up, nurture it, support it – the whole nine. You oxygen mask up the whole place with quality employees, amazing company culture, and employee health benefits. But if you’re not securing your own mask, who suffers the fallout?

While group health insurance benefits help to pay for treatment of a disabling injury or illness, they don’t cover income loss. The financial stresses that result from not being able to pay for groceries, rent/mortgage, family expenses, bills, and other daily necessities can cause detrimental, lasting effects. As a business owner the stakes are even higher.

For example, I know a gentleman who turned 65 this year. At age 49, he was decades into owning a successful business with three satisfied employees. At 50, he took a 20-foot fall from a ladder and suffered a traumatic brain injury. It was established by his doctors that he would never be able to work again. He’s been on disability for 15 years.

While Canada Pension Plan provides a monthly disability payment, he lost his business – the one he’d poured his heart into – built it from the ground up, nurtured it, supported it – the whole nine.

The thing about accidents and illnesses is that they’re usually unexpected, and while you can’t always prepare for worst, you can sure try. This is why critical illness, long term disability, and even life insurance are all (or should be) an essential part of owning a business.
And this doesn’t have a be a huge feat. Could your business handle a <2% increase in expenses? Can you trim other expenses to make way for this important business requirement? Because while we don’t like to think about bad things happening, it’s too important to not pay attention. It is much better to be prepared for these situations than to add financial hardship onto an already stressful situation.

A recent report found that nearly half (48%) of the respondents to a survey admitted they do not believe they have enough funds to cover unexpected – or even expected – expenses should a serious illness prevent them from working, or if they are stuck going through a prolonged recovery period from an injury. So, how can you prepare?

Disability Insurance will pay you a monthly income if you are unable to work due to an injury or illness, working in lieu of a salary or living wage. Critical Illness Insurance will pay you a tax-free lump sum benefit if you are diagnosed with one of the covered critical illnesses – sometimes up to $50,000.

Like the example I mentioned above, the death of a key person in a small business can cause the immediate death of that company. Partner & Key Person Life Insurance can help the company survive the misfortune of losing an employee that is vital to the organization’s success. Your company purchases a life insurance policy on the key employee, pays the premiums, and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance proceeds. The funds can be used to pay for the deceased partner’s shares, pay off debt, recruitment, or any other company needs.

If the last 2+ years have taught us anything, it’s that we cannot predict the future – especially when it’s unprecedented (I know, aren’t you sick of that word?). Long-term COVID effects present a new threat for long term disability, as we don’t currently know how or what to expect after years, or even decades post-contamination.

The bottom line is this: when you know you’re taken care of, you know your employees, families, and clients are taken care of too. Don’t look at it like you’re preparing for the worst – you’re setting up the people who love and rely on you for the best possible outcome if misfortune should arise. You’re simply securing your own mask.

Contact Michele Mactaggart
Bensol Consulting