For the past three years I’ve had “Benefits” as a line item on my Business Plan for the coming year. Every year it got pushed down farther on the list and lets face it, doing research on insurance offerings is about as interesting as watching paint dry. Last year I had the opportunity to get to know Margaret Reynolds Life and Health Insurance Advisor from Desjardin Financial Security (@BC_InsuranceGal) and I sat down with her to talk about benefit policies for small business owners. We talked specifically about women 40 to 50ish but the advice is applicable to all small business owners, especially solopreneurs.
- Income Protection
Income protection is important but for a new business it can be a challenge as full sickness/accident plans require income verification for at least one year. Most new businesses aren’t making much or haven’t been in business long enough to qualify, and some people aren’t medically insurable.
There are easy-to-get options, that provide an injury only plan where the premium is based on your occupation and income, acceptance is guaranteed and there is no upfront income verification required. You can have a waiting period of 0 days, 30 days or 120 days, 24 hour coverage or non-occupation coverage (WCB coverage at work) benefits could be received for 5 years or all the way to 70 (increasing to 75 in a few weeks). For some businesses this is the perfect starter plan & later on they can move into a full accident/sickness plan, for others the injury-only plan is the perfect fit now and in the future.
- Critical Illness
Critical Illness insurance also helps to protect your income, lifestyle and savings. CI pays you a tax free one-time lump sum of money 30 days after diagnosis of a defined critical illness: Cancer, Heart Attack & stroke are the most common claims. There are a variety of CI plans available, many full featured plans cover between 10 and 25 illnesses which you can often be approved for by answering no to 10 questions. The are some “no questions” asked plans available as well and in some cases for some people they may fit their need although their cost is higher.
- Extended Medical Benefits
For extended medical benefits there are three options.
1. Pay from your own pocket
2. Personal extended health plans which offer a monthly premium model offering converge on paramedical services, drug coverage and dental options. These types of plans have annual maximums and a choice of deductibles, premiums for self-employed are tax deductible. Optional use for these plans are to group a few together to create a group plan for a group of workers that are too small for a standard group plan. Worth noting that if you have regular prescriptions prior to applying they will most likely be excluded from new coverage, this is standard for any private health plan.
3. There are also Private Health Savings Plans (PHSP). These plans allows a company to use health and dental expenses as a 100% taxable deduction. There is a one-time sign up fee of about $295 and if you are incorporated there are no premiums and you can set your annual spending limit (can create different classes of employees). If you are Sole Proprietor CRA requires an insurance component so the cost is $20 a month and includes a really good travel insurance plan. CRA also limits the amount you can claim in a year, $1,500 for you ($1,500 for spouse & $800 per child), if you have an employee and set their spending limit higher you can set yours at the same level. Bonus, no medical and lots of expenses are covered.
- Long Term Care
Long Term Care insurance can often be a better choice than Disability for anyone over 50 as LTC will pay you a tax free lump sum monthly for a period of two, five or lifetime and coverage lasts the rest of your life while most disability plans have an end date of 65 or 70. LTC premiums are not based on your income or occupation, they is based on your age, health & how much monthly benefit you want to receive.
Now you know, there’s no excuse for you not make an appointment with a Life and Health Insurance professional armed with the information you need to know to make an informed decision.
One more thing I can tick off my to-do list. win/win.
Bonnie Sainsbury is a Business Development Specialist with reSET Mobile Marketing who can help you use technology to create business results. Is your website mobile friendly? 1 in 7 google searches are done on mobile devices.