A TOUCH OF FROST #8 – ABCs of Insurance, 2025 in Two Charts & Canmore Nordic Centre
ABCs of Insurance
Whether you are 16 or 80, if you have a car, one thing is promised: you have car insurance. I can also guarantee something else: if you own a home, especially with a mortgage, you likely have some form of property insurance, as it's often required by lenders. These are essential to have, in both circumstances. You cannot legally drive a car without insurance on it and, if you have a mortgage, then lenders require insurance to protect the property (and their investment). The one thing that stands out about this is that, when it comes to these insurance policies, no one ever bats an eye. No one plans or expects to get into a car crash or a flood in their home, but people plan for it anyway. Shockingly, Canadians aren’t as insured personally as they are for their house and car, which goes against the rule of Always Be Covered with insurance. Let’s go into why you need each type of insurance.
Critical Illness Insurance
Here are some surprising stats I found from Benefits by Design:
- 2 in 5 (40%) Canadians are expected to develop cancer in their lifetime.
- Cancer is the number one cause of death in Canada, accounting for 30% of them.
- 14 Canadian adults with diagnosed heart disease die every hour.
- New data shows the annual number of strokes in Canada has increased from 62,000 in 2018 to over 108,000 in 2022.
- In 2019, the combined worldwide cost of dementia, including medical expenses, lost earnings, and unpaid caretaker costs (which account for approximately 50% of total care costs), was more than USD$1.3 trillion.
Much like fire, flood, theft, or hail, many of these critical illnesses can come as a surprise. You never want to plan to get cancer, have a stroke, or have dementia, but you also don’t plan for fires in your home… Your health is your most valuable asset. Critical Illness Insurance is designed to protect it when you need it most. If you're diagnosed with a covered condition and survive the required waiting period, you’ll receive a lump-sum payment that can be used however you see fit.
While provincial healthcare in Canada covers many essential services, there are still significant out-of-pocket costs it doesn’t touch like specialized treatments, private nursing, travel for care, or home modifications. This benefit can help bridge those gaps and offer financial relief, so that you can focus on recovery, not expenses. A unique feature is the return of premium rider that can be added on, where if you don’t make a claim during the policy’s lifetime, you can get all your money back, something you can’t get with your car insurance.
Disability Insurance
Around 27% of Canadians over the age of 15 have one or more disabilities limiting their daily activities, an increase of 5% since 2017 (McCaffery, 2023). In that, 24% of working-age adults and 40% of seniors had a disability. Disabilities are also increasing each year, and many people have to either start working less, stop work altogether, or never being able to work fully. Most times, people will have some coverage in their benefits but group benefits rarely cover 100% of your salary, often leaving gaps. This can leave holes, where either more debt will be accumulated or a lifestyle change may have to be made, which can affect families physically and mentally. With disability insurance, you can top up the monthly income provided by your benefits, minimizing the overall impact.
Life Insurance
We all know the age-old saying, “There’s two guarantees in life: death and taxes.” It’s not fun thinking about or planning for, but it is true. The saying talks nothing about car accidents or hail damage, but here we are, making sure our cars and houses are always covered, although not always ourselves. Life insurance changes that. If you have an active life insurance policy when you die, you get a death benefit paid to your designated beneficiary(ies), which can help with a plethora of things. If you have a whole life policy, you build a cash value over time, which you can access during your lifetime, plus a guaranteed death benefit for your beneficiaries. Many times, when you buy a house, you will get a mortgage insurance where coverage decreases as the mortgage decreases but payments stay the same. Only the remaining amount of the outstanding loan is paid out on death, with the lender as the beneficiary, leaving your family not fully covered if you have other debts and obligations. Why not get a term or whole life policy, where the premiums don’t change, but neither does the coverage, so no matter if you pass in year 5 or 15, if you have an active policy, the full death benefit will be paid out
The ABCs of Insurance remind us that we must Always Be Covered for our greatest asset: ourselves. We look out for our cars and houses, but not always us. That’s where we start weighing whether it’s worth it or not. My opinion? It is always worth it to be covered for whatever life throws at us. There’s a possibility you will never be healthier than you are right now, so why not check into some of these types of insurance and see how you can always be covered.
McCaffery, K. (2023, December 4). Rate of disability increases in Canada. Insurance Portal. https://insurance-portal.ca/article/rate-of-disability-increases-in-canada/.
What We’re Reading and Watching
In the photo on the right, media mentions of the word 'bearish' has been shown tripling year over year (other words like 'stagflation' also show big jumps), while SPY hits ATHs repeatedly and ETF flows are 12% ahead of last year’s record pace. In other words, doomerism has simply fallen on deaf ears.
In the above photo, “Investors without emergency savings spend nearly twice as much time on their finances. Vanguard clients without emergency savings spend 7.3 hours per week thinking about and dealing with their finances, compared with 3.7 hours for clients with at least $2,000 in emergency savings.” Costa, P., & de la Fuente, M. M. M. (2025, April). The relationship between emergency savings, financial well-being, and financial stress (Vanguard Research). The Vanguard Group, Inc.
How to avoid conflict over family mementos – David Chilton
- The Wealthy Barber (David Chilton) discusses two fun ways your family can avoid conflicts that come up during the passing out of family heirlooms.
Finally, this chart of tech’s dominance in the U.S. compared to Cal Ripken in the MLB by Larry Adams, CIO of Raymond James Financial.
Chip-Ins From the Week – Canmore Nordic Centre
Did you know the Canmore Nordic Centre was built for the 1988 Winter Olympics? What used to be old mining land was transformed into a world-class venue for cross-country skiing, biathlon, and Nordic combined. Since then, it’s been upgraded into a year-round playground: skiing in winter, biking and hiking in summer, and still hosting international competitions. Every time I visit, I’m in awe. I’ve even collected old biathlon shells from the grounds…tiny reminders of the history it has. Every time I go there, I always consider trying it but I haven’t yet, maybe one day. It’s definitely a must-stop spot to explore when in Canmore!
Quote of the Week
Writer Harold V. Melchert reminds us that success is sweeter when you savour the path:
"Live your life each day as you would climb a mountain. An occasional glance toward the summit keeps the goal in mind, but many beautiful scenes are to be observed from each new vantage point. Climb slowly, steadily, enjoying each passing moment; and the view from the summit will serve as a fitting climax for the journey."
Source: The Toastmaster magazine (October 1965)
Enjoy the weekend,
Jonny
Disclaimer: Information in this article is from sources believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The views are those of the author, Jonathan Van Dam, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. This provides links to other Internet sites for the convenience of users. Raymond James Ltd. is not responsible for the availability or content of these external sites, nor does Raymond James Ltd endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Raymond James Ltd adheres to. Raymond James Ltd. is a Member Canadian Investor Protection Fund.
