• Kingston Young Entrepreneurs Group (KYEG) - Speed Networking Social
    Tue, Jul 27, 2004 5:00 PM - 7:00 PM
    Have you heard of 'speed dating'? It's like that but for business networking. You'll have the opportunity to meet other young entrepreneurs one on one for 2 minutes each getting to share your business stories. If you're a member and bring a new YE it's free, if you don't it's $10. New YE's it's $10. Cash bar, appetizers will be served. Pre-Registration Required. For detailed invitation visit:


Could a Disability or Critical Illness Really Cost You Your Business?

article by: Dara Shaw Brachman, B.Comm, RHU

What would you say is your greatest asset? Is it your home?  Your car?  Maybe your investments or RRSPs?  Is it your business?  I suggest that your greatest asset is your health that enables you to generate income.  In fact, you are worth a fortune!  Consider that a 30 year old earning $3,000 per month can earn $1.8 million dollars by age 65*.  A 40 year old earning $5,000 per month can earn $2 million dollars by age 65*.

If you became disabled or critically ill, what impact would it have on your family and business?  How long could your business survive without your active participation?  How long could you afford to draw funds or income from your business?  Six months?  A year?  Two years?  Longer?

But it won't happen to me you might say.  Unfortunately, the statistics indicate that there is a significant likelihood of developing a critical illness or disability during your working life.  Consider that 1 in 3 Canadians will be disabled for 90 days or longer at least once prior to age 65.  If a disability lasts at least 90 days, then the average duration is 2.9 years.  The odds of developing heart disease during your lifetime are 1 in 2 for men and 1 in 3 for women.  The odds of developing cancer are 2 in 5 for men and 1 in 3 for women.

If you agree that your ability to generate income is your greatest asset and that there is a reasonable chance that this asset could be jeopardized, then there are steps you can take to ensure your financial security.  A financial advisor can assist you to develop a solid financial security plan which could include the following types of coverage:

Disability insurance pays you a monthly benefit to replace your income if you become disabled and cannot perform the duties of your job.

Business overhead insurance pays a monthly benefit to cover fixed business expenses like utilities, rent, salaries and property taxes.

Critical illness insurance pays a one time, lump sum benefit if you are diagnosed with a critical illness and survive, usually for 30 days.  This money can be used any way you wish - perhaps to pay off your mortgage or other bills; take a family vacation; for timely out of country medical treatment; or maybe so that your spouse or partner can take time off work to spend with you.  If you own a business you might use these funds to hire additional staff or pay off business loans.

Partner buy out insurance provides funds to purchase a disabled partner's share of the business.

A financial advisor, particularly one with a specialized income protection designation such as RHU (Registered Health Underwriter) or CLU (Chartered Life Underwriter), can assist you to develop your financial security plan.  If you already insure your house and car, isn't it about time you protected your greatest asset, your income?

*Assuming a 2% increase to income per year.

Sources: 1985 Commissioner's Disability Table A & CIA 86-92 Aggregate Mortality Table; Canada 1996 Census; Heart and Stroke Foundation 2001; National Cancer Institute of Canada; Canadian Cancer Statistics 2000.

Dara is the owner of King Benefits Consulting Inc.