Working Moms Insurance for Critically Ill Children
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There are approximately 3.9 million mothers with children under 18 in Canada. The document discusses options for replacing a mother's income if her child becomes critically ill, including loans, RRSPs, or help from friends. It presents the costs of borrowing money over one year or 20 years. The document proposes critical illness insurance coverage of $200,000 to replace the mother's income, $25,000 to cover expenses if the child is sick, and $25,000 for the mother's leave of absence, giving an example of a 38-year-old mother with a 5-year-old child.
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Working Moms Insurance for Critically Ill Children
- 1. Moms…
- 2. …not just moms but working moms… …with children under 18
- 3. In Canada, there are… …3.9 million mothers with children under the age of 18* * General social survey – family, 2006 (cycle 20). Statscan
- 4. Action plan when the child is critically ill
- 5. How will she replace her income? Loan RRSP Friend
- 6. Thinking of borrowing? 1 year $2,140/month 20 years $163/month
- 7. The solution… Leave of Absence insurance protection
- 8. Is it really necessary to have C.I. on a child?
- 9. The proposed coverage $200,000 to T20 replace income C.I. $25,000 to cover T20 expenses if sick $25,000 for C.I. T100 mom’s leave of absence… Mom age 38; child, 5 years old
- 10. The proposed coverage $200,000 to T20 replace income C.I. $25,000 to cover T20 expenses if sick $25,000 for C.I. T100 mom’s leave of absence… Mom age 38; child, 5 years old
- 11. Working moms… …with children under 18
Editor's Notes
- This production is about workingmoms, eithermarried, divorced or separated. In this presentation, the moms we are targeting are those with children under 18. The question is, how many moms do we have in Canada that meet this definition?
- There we have it…In Canada there are 3.9 million motherswithchildrenunder the age of 18.
- Imagine for a second that a child is diagnosed with cancer. In itself, this is a catastrophe and mom’s immediate reaction would compel her to attend to her child’s needs 24 hour a day, 7 days a week and for as long as that child needs her support.But then comes the additional financial factor to an already stressful situation: she needs a leave of absence from her employer, which implies a loss of income for perhaps a few months over and above those unforeseen expenses still to arise.Now what!
- The obvious question is how will the family replace her income? Let’s examine what would normally come to mind immediately:1. They could borrow a sufficient amount to cover, let’s say, a 6 month leave of absence, OR2. Fund the lost income by withdrawing money from their savings, possibly including RRSPs, OR3. Try to find a friend or friends that would help the family with this financial problem.This last solution is probably the least appealing and the most difficult to consider.Withdrawing money from savings or RRSPs could impact the family’s future retirement income and if this were the only solution, I suppose it could be contemplated.If their credit is OK, borrowing money should certainly be taken into account. However let’s examine the cost associated with the loan solution.
- Borrowing $25,000 at 5% represents monthly repayments of $2,140 per month if the loan was to be repaid over one year. The same loan amount repaid over 20 years would force payments of $163 per month. Given those figures, I’m sure you would agree that this solution should be discarded if at all possible.
- Now, what if we could find an insurance solution to this problem? What if we could tailor a package that would in fact be equivalent (CLICK) to a leave of absence insurance policy?That policy exists today and is called “Juvenile Critical Illness Insurance.” And there are specific ways in which we can package this product within another coverage and turn it into leave of absence insurance., but…
- Is it feasible or even desirable to own critical illness insurance on a child’s life? Given this news story, I would think that this insurance is absolutely necessary for those families with children under 18. Let’s examine a typical insurance package
- The package could include the following:A Life insurance 20 year term coverage on mom’s life. For this case study it is an ideal product to create a capital until the child reaches adulthood. This capital would replace mom’s income should she die prematurely while the children are still at home.The critical illness rider on her own life is to protect her financially should she suffer from a critical illness which would affect her ability to take care of her children coupled with the added expenses resulting from this critical illness. This would prevent her savings going on empty.Finally, the critical illness protection on the child’s life in this example, will make it possible for mom to take a leave of absence should her child suffer a critical illness.In this example, we will look at costs based on a 38 year old mom and her 5 year old daughter.
- The package could include the following:A Life insurance 20 year term coverage on mom’s life. For this case study it is an ideal product to create a capital until the child reaches adulthood. This capital would replace mom’s income should she die prematurely while the children are still at home.The critical illness rider on her own life is to protect her financially should she suffer from a critical illness which would affect her ability to take care of her children coupled with the added expenses resulting from this critical illness. This would prevent her savings going on empty.Finally, the critical illness protection on the child’s life in this example, will make it possible for mom to take a leave of absence should her child suffer a critical illness.In this example, we will look at costs based on a 38 year old mom and her 5 year old daughter.
- This production is about workingmoms, eithermarried, divorced or separated. In this presentation, the moms we are targeting are those with children under 18. The question is, how many moms do we have in Canada that meet this definition?