The True Value of Your Ability to Earn

Carl, at 47, had always been a hard worker.

He co-owned a business with his brother, Jack, and together they had built it from the ground up. Their days were long, but the rewards – financial security, a comfortable home, and plans for a bright future – were worth the effort.

One fateful day, Carl found himself facing a reality he had never anticipated. An unexpected illness rendered him unable to work. The business, which had thrived with both brothers at the helm, began to struggle. Jack tried to manage both their roles, but the strain was evident. The revenue was split, even though Carl couldn’t contribute, and the financial strain began to mount.

Carl is worried about losing his home as he is having trouble making the mortgage payments.

In the current economic climate, the Bank of Canada has held its policy rate at 5.0%, with bank prime rates at 7.20%. This has been influenced by various factors, including high inflation and the Bank’s efforts to cool the economy. Mortgage interest costs, which were once considered negligible for inflationary contribution, have added almost a full percentage to July’s headline inflation growth. This indicates that the cost of borrowing has become a significant factor in the overall economic picture.

Some 46% of mortgage foreclosures are due to disability. With the rising mortgage interest rates and the economic pressures of inflation, many families like Carl’s are feeling the strain. Given the current economic conditions, the situation may have worsened.

With Carl’s current condition, it becomes even more challenging for his family. His wife finds it difficult to work as she is busy raising their children and caring for him. Given the rising mortgage interest rates and the economic pressures of inflation, many families like Carl’s are feeling the strain 

The Canada Pension Plan does offer a disability benefit, but it’s not immediate. And while Carl could potentially qualify, the payout would be a mere fraction of his previous income. Borrowing money from the bank became a challenge without a reliable income source, and cashing in his RRSPs would jeopardize his retirement.

Disability insurance, Carl realized, could have been the solution.

A Disability Income Insurance policy pays a benefit after a specified waiting period, ensuring that even if you’re unable to work, you still have a source of income. Some policies even cover partial disabilities. The key is to have this insurance in place before a disability occurs. The cost of such insurance can vary based on factors like age, occupation, and health. Generally, the younger and healthier you are when you get the policy, the lower the premiums. It’s also essential to understand that once you’re disabled, you can’t just purchase a policy – it needs to be in place beforehand.

Carl’s story serves as a poignant reminder of the importance of planning for the unexpected.

Your ability to earn a living is invaluable. While we insure our homes, cars, and other assets, it’s crucial not to overlook the very thing that makes all those assets possible: our income.

Want to know more about protecting your lifestyle in case of disability?

Call today! 613-416-2020