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When Life Strikes: How Life Insurance, Disability Insurance, & Critical Illness Insurance Protects Condo Owners (Community+)

Updated: Apr 12

Welcome to Stratastic’s first “Community +” blog post, where guest writers from across our community share their knowledge and expertise with our audience. We're starting this series off with a post of condo residents, and it's an important one! We never know when life strikes, and being prepared with critical illness insurance, personal insurance, and/or disability insurance is key not only to protecting yourself, but also to protecting your condominium living, whether you're a condo owner or a tenant.

Today, we're delighted to have a guest writer joining us to discuss a topic that's often overlooked by Ontario condo owners and residents: the types of personal insurance that are crucial for protecting your peace of mind and condo living!

While most condo owners understand the importance of home insurance, few realize the significance of having personal insurance that specifically protects them against potential life challenges. These can happen to anyone, but can be particularly devastating for condo owners who have financial obligations such as monthly maintenance fees.

Life Insurance, Critical Illness Insurance, and Disability Insurance: How Insurance Protects Condo Owners and Tenants

Life Insurance: What Is It? How Does It Work?

Think of life insurance like a safety net for your loved ones. When you have a life insurance policy, you pay a regular amount of money (called a "premium") to an insurance company in exchange for the company committing to give your family a lump sum of money once you pass away. Life insurance policies are a way to ensure your family is financially protected if, or when, something happens to you. In Canada, there are different types of life insurance policies, so it's important that you take the time to understand exactly what each one offers before choosing the right one for you.

Disability Insurance: How Does It Help Me?

Many people may not realize they should also protect themselves with disability insurance. Some may think they can rely on disability insurance from the Government of Canada (and there are public service group insurance plans for public service employees, as well as some options through the employee insurance (EI) plans for those who qualify). We strongly suggest checking out what the federal and provincial governments provide to you, verifying whether your employer has any additional benefits for disability insurance, and seeking out additional help via a licensed insurance broker or specialist for any supplemental coverage.

Disability Resource Centre: Disability Leave Ontario

Those needing to take disability leave (Ontario), should consider the above advice, as well as looking for additional disability-related resources that may be helpful to them. Check out some options out here: Disability Organizations Toronto. or more here: Disability Organizations Canada.

Dealing with Disability in the Workplace: Discrimination and Examples

Dealing with disability discrimination in the workplace (Canada)? Looking for disability discrimination examples? Curious what the duty to accommodate disabilities is for employers? These are great questions, and we recommend starting the search online via the resources provided, and considering contacting a lawyer for professional advice about your particular case.

Critical Illness: Insurance, Leave, and Meaning

Critical Illness Insurance Meaning: Critical Illness Insurance is a type of insurance that provides a lump-sum payment if you are diagnosed with a serious illness that is covered by your policy (typically including medical conditions such as cancer, heart attack, stroke, etc.). Unlike life insurance, the benefit is paid out while you are still alive, meaning the money can be used to cover medical expenses, replace lost income, or pay for additional financial obligations while you undergo recovery.

It's a safety net for yourself (and your family), which helps condo owners and tenants protect their financial health while caring for their own medical health - no need to worry about losing your condo home (whether owned or rented).

Be careful not to confuse this with Critical Illness Life Insurance, where the benefit is similar if you are diagnosed with a critical illness, however, if you pass away during the term of the policy (before or after being diagnosed with a critical illness), your beneficiaries also receive a death benefit). Basically, Critical Illness Life Insurance combines critical illness coverage with Life Insurance coverage, offering a broader scope of financial security.

If you've been diagnosed with a critical illness and require critical illness leave, find out more information here: Critical Illness Leave Ontario.

Let's Hear from our Community+ Expert on Life Insurance, Critical Illness Insurance, and Disability Insurance

How Insurance Protects Condo Owners and Tenants by Keeping them Financially Safe When Life Strikes

Our guest writer is an insurance expert with years of experience working with condo owners and residents in Ontario. She'll be sharing her insights on the different types of insurance policies available to condo owners, including life insurance, critical illness insurance, and disability insurance. But before we dive into the details, let's get to know our guest writer.

Nicole Bird is a passionate advocate for protecting people’s finances and has helped numerous residents navigate the complex world of personal insurance. Her expertise and commitment to educating others make her the perfect guest writer for Stratastic's homeowner audience. So sit back, relax, and get ready to learn everything you need to know about personal insurance and how it can protect condo owners! And a special thank you to Nicole for her contribution and collaboration with Stratastic’s collective condo community!


When Life Strikes:

How Life Insurance, Disability Insurance, & Critical Illness Insurance Protects Condo Owners & Tenants

(Community+ Guest Post by Nicole Bird)

Hello Stratastic Community!

My name is Nicole Bird and I am a financial advisor and specialize in insurance, investments and cash flow planning. I have been in the industry as an independent advisor with Desjardins Financial Security Independent Network (DFSIN) for 6 years now and one thing that I appreciate more than anything is education. There is so much information out there that at times it can be difficult to navigate the truths and importance of finance and insurance.

I got into this industry for very personal reasons. I experienced an extreme lack of education with school and previous employers and I thought I had all my finances set up for success. I realized soon into the life of independence that I was wrong.

I experienced something in my health that made me hard to insure, drained my life savings and put me into debt all in my early 20’s. This happened because I did not have an advisor of my own to look at the gaps in my personal insurances, investments and cash flow and set me up for continued success.

I want my clients and anyone that I work with to thrive and avoid making the same mistakes that I did prior to having the education that I now carry. There is so much information out there and bad financial advice that it is hard to know where to start so…

Do I Really Need Life Insurance, Critical Illness Insurance, or Disability Insurance?

Let’s start with a common question: “Do I really need insurance and which types actually benefit me?” and dive right into the different types of insurance and how they can benefit condo owners!

What is Life Insurance, and how does it benefit me?

Life insurance is important for everyone, regardless of their assets and living situation. However, condo owners do have additional specific needs when it comes to life insurance.

Some main examples of a homeowner’s specific needs related to life insurance may include:

  • Mortgages + Debts: If you are a condo owner, you may have a mortgage or other debts that would need to be paid off in the event of your death. Life insurance can help ensure that your loved ones are not burdened with these financial obligations after you pass away.

  • Cost of Living: Life insurance protects your cost of living. If you are the primary income earner for your family or if there is anyone at all dependent on your income then life insurance can provide a source of income for them after you are gone. This can help ensure that they are able to maintain their standard of living and cover expenses like mortgage payments, utilities, and other bills in the event you should pass away.

  • Co-Owners + Co-Borrowers: If you have co-owners or co-borrowers on your mortgage, and something were to happen to one of the co-owners, the remaining co-owner(s) would be responsible for paying off the mortgage. Life insurance can help ensure that the remaining co-owners have the funds necessary to pay off the mortgage and keep the condo.

  • Company Shareholders: Life insurance can be used for shareholders of a company. If you are a main shareholder or if your business' success is heavily reliant on your presence - then life insurance is mandatory for the remaining shareholders or successors of your company.

…But did you know that life insurance is not just for those who may pass away?

  • Tax-Efficient Investment Strategy: Life insurance can be used for the living as an additional and tax-efficient investment strategy. If you foresee yourself paying capital gains or you want to offset a legacy or your baseline income, or if you just merely want an additional investment strategy for your portfolio then look no further. Certain Permanent Life Insurance Policies can be used to do all of these things and so much more.

  • Fund Future Investments: Life insurance can be used to fund future investments. With certain types of permanent insurance you can borrow against the cash value that accrues inside of the policy. This is a great option for real estate investors who plan to purchase multiple homes or condos in their future. You can also use the loans for other investments to create more residual income for yourself for the future as the return is going to be higher than the interest on the loan itself. Think of it like a fancy HELOC without the home attached to it! This type of insurance can be fast tracked and accessible within the first couple of years the policy is in place and could even be fully funded by the 5th year. You can also overfund these types of policies in order to access more cash value, more returns and more tax strategies for the future.

Overall, life insurance can provide peace of mind for condo owners and their loved ones. It can help ensure that all of their financial obligations are taken care of and that their loved ones are able to maintain their standard of living even after they are gone. It can be used for tax strategies, extra investment strategies as well as succession planning, key shareholder protection, loan purposes, family protection and much more.

You should ask an advisor how they can use life insurance to benefit your portfolio - not just should you pass, but also as you live!

What is Disability Insurance, and how does it benefit me?

Disability insurance is important for anyone to protect their current income and lifestyle expenses, but disability is especially important for condo owners for many reasons as well. Some of those reasons may include:

  • Inability to Work Due to a Disability: Disability insurance can help protect homeowners in the event that they become unable to work due to a disability. This type of insurance can provide financial support to cover expenses such as mortgage and condo payments, condo maintenance fees, utilities, and other living costs. It's important to consider disability insurance as part of a comprehensive financial plan.

  • Long-Term Disability Coverage: Many people have disability insurance through their employer- but often, it only covers short-term and not long-term disability. This means if you are off for 90 days or more you will not receive the disability payment and you will be left reliant on other government programs such as employment insurance etc. This can leave individuals in a not so favorable living situation.

  • Limitations of an Employer’s Insurance: When your employer owns the disability policy (or ANY insurance policy you own) you also have to keep in mind that you have no control over said policy. This means if you leave the employer for any reason whether it be the company shuts down, you are laid off, you quit or even if you retire from this organization- your insurance does not go with you. Seeking advice from your financial advisor is vital in making sure that you are covering all gaps in your financial planning including disability insurance.

  • Self-Employment: Disability insurance is vital for anyone who is self employed. This is because your income is heavily reliant on your presence in the company/sole proprietorship that you own. If you do not show up to work would you still get paid? If your answer is no- then you should definitely look into protecting your income- with disability insurance being one of the top priorities.

Overall, disability insurance is important to have in order to assure protection over your income. It can help pay you a monthly income while you are off work due to any short term or long term disability (depending on your policy). It can also provide peace of mind for self employed individuals who do not have coverage elsewhere.

Speak to an advisor today to see if disability insurance is important for your plan!

What is Critical Illness Insurance, and how does it benefit me?

Critical illness insurance is important for anyone who has a working income and wants to protect their health, but it’s especially vital for condo owners for many reasons.

Some reasons why critical illness insurance is important include:

  • Continue Paying Debts and Bills: If you are a condo owner, you may have a mortgage or other debts and bills that would need to be paid off in the event that you get critically ill and still need to work. Critical illness helps to ensure that you and your family do not have the burden of these financial obligations should you need time off work. Similar to life insurance, critical illness pays you a lump sum one time for the diagnosis of any covered illness.

  • Afford Extra Medical Expenses: Critical illness can help with extra medical expenses. A lot of individuals think that because we live in Ontario - that all of our medical expenses are covered. This is simply a myth. Many surgeries, tests, medications and hospital stays are not covered through OHIP so Critical illness insurance can help to pay for these things should you become critically ill. This can help alleviate extra financial stress should this ever happen to you.

  • Company Shareholders: Critical Illness insurance can be used for shareholders of a company. If you are a main shareholder or if the profitability of your income is reliant on your presence - then critical illness insurance is a great way to pay out the company to hire a temporary replacement should you become critically ill. It can also be used for key employees and shareholders and can be used as a corporate expense depending on how the policy is structured.

  • Tax Efficiency: Critical illness can be used over a prolonged period of time to tax efficiently receive money from the corporation. Talk to your advisor about the benefits of Executive Health Plans and how they can help with your corporation as a tax strategy.

  • Fund Future Investments: Critical Illness can be used to fund future investments. With certain types of permanent critical illness insurance you can add a return of premium option to it. This means that if you do not get critically ill by the time the policy ends you can get all of your money back. This is a great option for extra savings and for real estate investors who plan to purchase multiple homes or condos in their future. You can also borrow against the value in some cases as a policy loan and use this loan for other investments to create more residual income for yourself for the future.

Overall, critical illness insurance can be important for both condo owners as it provides financial support in case of a serious illness.

It can help cover medical expenses and other costs, allowing the owner to focus on their recovery instead of worrying about finances. It can be used as a corporate tax strategy and for business protection planning for those businesses who rely on the key employees to function. It is a great way to create extra retirement savings or emergency savings while protecting your health at the same time if you are to put in place a return of contributions option.

You should talk to an advisor on how Critical Illness Insurance can help protect your financial plan and assure there are no gaps in income protection.

How Do I Know Whether Life Insurance, Critical Illness Insurance, Disability Insurance is Right For Me?

There are so many types of insurance that individuals or companies can put in place to protect themselves, other shareholders, co-owners and borrowers and their families. Navigating the best options for your personal situation is vital to any successful financial plan.

Speak with an advisor to see what strategies are best for you as insurance should be tailor suited to your needs and not a cookie cutter approach. A licensed professional can walk you through the right questions and considerations to ensure you are adequately protected but also not paying more than you have to.

If you do not have an advisor, please contact me as I would be happy to help answer any questions you may have. We can do a complimentary collaborative discovery and see if we are a good fit for one another!

I'm here to help,

Nicole Bird (Financial Advisor and Certified Cash Flow Specialist)

Connect with Nicole Bird via LinkedIn, where all her contact forms and details are available.

Disclaimer: The preceding information is being presented only on the understanding that it is intended for information purposes only. Neither Nicole Bird nor Desjardins Financial Security Independent Network, has been engaged for the purpose of providing legal, taxation, or other professional advice. No one should act upon the examples/information without a thorough examination of the legal/tax situation with the appropriate professional advisors.

Community+ Guest Post via Stratastic Inc. (Edited by Stratastic Inc.).

P.S. Don't forget to subscribe to Stratastic for more valuable content like this!

Updated on April 12, 2024.


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