Life insurance usually provides a tax-free and lump sum amount that can be used to pay for your funeral, cover your outstanding debts, and help your family maintain their standard of living in case of your premature death.
This type of coverage should be considered if you have a partner, children, or other dependents, and if you have a mortgage and carry any debt.
Disability insurance will cover up to 85% of your income if you are unable to work as a result of an injury, serious illness, or mental health issue. You should expect to pay a monthly premium of about $100, even if you’re healthy, have no prior conditions and don’t smoke.
Given that many contractors don’t get sick days, and that 1 in 3 Canadians suffer from a disability, many consider this insurance as critical. This type of insurance is especially important for workers that are single or take on the majority of the financial responsibility for their household.
Critical Illness Insurance
Critical illness insurance will cover you for a range of illnesses, including cancer, strokes, and heart disease. Unlike disability insurance, which provides a monthly payment, critical illness insurance pays out a lump sum to help you manage the costs if your survive the waiting period (usually 30 days).
This type of insurance tends to be cheaper than disability insurance and most people will have a monthly premium of less than $100. It becomes more expensive when you increase the number of illnesses that are covered under your plan. Like disability insurance, this type of insurance is especially critical for those who don’t have someone else who could cover their costs in case they become ill.