It’s November and that means Remembrance Day, Divali and the intensification of the holiday season. It’s also Financial Literacy month.

So in the spirit of financial literacy, I want to talk specifically about critical illness and disability insurance, especially for single people. I know it’s not as sexy as fraud but I think it’s important. I’ll get to fraud later this month. I just want to start this month by being pragmatic.

But first, critical illness and disability insurance. The easiest explanation is this: Critical illness gives you a one-time payout if you're diagnosed with something serious; disability insurance replaces a portion of your income if you can’t work.

We’ve all thought about what would happen if we get sick and can’t work. Ideally, we’d have a solid emergency fund, go on short- or long-term disability at work and have the support of family. Ideally.

Not everyone has that kind of social or family safety net. That’s why critical illness and disability insurance can be (I’m not giving you financial advice) something to think about.

I didn’t know about these types of insurance when I first started working for myself. I knew about life insurance, obviously Patrick, but that mostly works after you’re dead. What about when you’re alive?

Writing about insurance educated me and talking with my insurance agent gave me the details. I’ve had both forms of insurance for at least a decade. Definitely before the COVID-19 pandemic. I haven’t used them but I appreciate that they’re there if I need them. (I hope not.)

Now, costs. Like the majority of insurance policies, the more coverage you buy, plus age, plus health, the more you’ll pay in monthly premiums. Disability insurance can replace up to 85 per cent of your income. Critical illness insurance pays that lump sum, so the costs depend on the size of the policy. You can play around with calculators on the websites of most financial and insurance institutions but they won’t give you the quote, they’ll call you so be aware.

If you’re shopping around for these two types of insurance policies, keep these things in mind:

• The cost of the policy

• If the benefits are taxable

• Are those benefits adjusted for inflation?

• How long do you have to wait before receiving the benefits

• Can you increase coverage without a medical exam?

• How much you’ll get per month and will that cover your basic expenses/replace most of your income?

Also, read the fine print. Do you have to go through a rehab program is something to look for. Are you covered for more than the big three: cancer, heart attacks and strokes.

Like I said, insurance isn’t sexy. It’s one of those things you don’t want to think about until you have to think about it.

I’m working on an interview about critical illness insurance for the newsletter so send me any questions you have. Head’s up, that’s going to be paywalled and only sent to paying subscribers.

As part of this insurance conversation, I’m resurfacing an interview I did last year with Andrew Ostro, CEO and co-founder of PolicyMe^* a bunch of insurance questions about life, disability, critical illness and renter’s insurance.

Do I really need life insurance if I don’t have dependents? What about term vs. whole life or universal insurance?
If no one relies on you financially, like a partner, kids, or aging parents, you may not need life insurance right now.

However, if you have debt that someone else would have to take on if something happened to you, or if you’re planning to start a family and want to lock in lower rates while you’re still young and healthy, then it makes sense to get a policy in place early and get a gear up for the future.
When people ask about term vs. whole or universal life, I always say, start with what you actually need coverage for. That’s the most important thing.

Term life insurance is usually the best fit for most people. It covers you for a set period, like 20 or 30 years, and it’s straightforward and affordable. If you’ve got a mortgage, or young kids, or just want to make sure your family’s okay financially if something were to happen, term does the job.

Whole life and universal life, on the other hand, are more complex. They cover you for your entire life, and they include a savings or investment component. But in my experience, most people don’t actually need that level of coverage, and unfortunately, those policies are quite expensive.

What kind of insurance should I prioritize if I’m self-employed or don’t have workplace benefits?
If you’re self-employed or working freelance, one of the biggest things to keep in mind is that you don’t have the built-in safety net that often comes with a traditional job. So it’s on you to create that protection for yourself.
I’d focus on two main areas: life insurance and health insurance.

Start with life insurance if you have anyone who relies on your income. That could be a partner, kids, or even a co-signed loan. If something were to happen to you, life insurance makes sure your loved ones aren’t left with financial stress.

Then there's health and dental insurance, which people tend to overlook until it becomes urgent. While provincial healthcare covers the basics, it doesn’t cover things like dental, prescriptions, mental health support, or services like physiotherapy. If you don’t have access to a partner’s plan, it’s a good idea to look into a policy that can fill those gaps. (Editor's note: There is the Canadian Dental Care Plan but not everyone qualifies.)

Is renter’s insurance worth it if I don’t own a lot of stuff?
If you feel like you don’t own much, it’s easy to think renter’s insurance isn’t necessary. However, the value of renters’ insurance actually goes beyond just protecting your stuff.

Even if your furniture or clothes wouldn’t cost much to replace, renter’s insurance can also cover things like liability, so if someone gets hurt in your apartment or you accidentally cause damage to the building, you’re not stuck paying out of pocket. That’s the part people often overlook.
And when it comes to your personal belongings, it adds up faster than you think. Renter’s insurance is usually pretty affordable, so it’s one of those things that’s worth having, even just for peace of mind.

What’s the difference between disability and critical illness insurance and when and why do I need both?
Disability and critical illness insurance often get lumped together, but they do very different things, and both can play a role in protecting your income if something unexpected happens.

Disability insurance is really about replacing your income. If you get sick or injured and can’t work, disability insurance steps in and provides regular monthly benefits to help you keep up with living expenses. It can support you over a short or longer period, whether that’s months or even years, depending on your policy and recovery.

Critical illness insurance pays out a one-time lump sum if you're diagnosed with a serious condition like cancer or have a heart attack. It’s not tied to whether you can work or not; it’s more about giving you financial flexibility when life gets turned upside down.

So while both protect against health-related risks, they do it in different ways. One helps you manage day-to-day income loss, the other helps you deal with a crisis or recovery period.

How can I make sure I’m not overpaying for insurance I don’t actually need?
This is one of the most important questions people should be asking, because unfortunately, overpaying for insurance happens all the time.

The first step is getting clear on what you actually need to protect. If no one depends on your income, you may not need life insurance yet. If you already have good health coverage through work, you may not need to double up. It sounds simple, but when you take the time to match the coverage to your real needs, it becomes clear where you’re overspending.

Pay close attention to the type of insurance you’re buying, especially investment-based products, like whole life or universal life, if your goal is just basic protection. These plans can make sense in some situations, but in most cases, they’re quite expensive, and for most people, a term life policy paired with investing the difference through a tax-advantaged account can be a smarter, more cost-effective approach.

And finally, it helps to revisit your coverage when your life changes. A new job, a move, a relationship change, all of those are good reasons to reassess. The best insurance plan is the one that fits your life today,

What's the best way to compare policies if looking for yourself?
The best thing you can do is approach it the same way you’d shop for anything else. Understand what you actually need, and then do your homework.
Start with the basics: what type of coverage are you looking for? What do you want it to protect? That alone helps narrow things down because not every provider will offer the same types of policies and features, so having clear goals makes it easier to filter your options.

Next, look at the core features of each policy and compare quotes. That means the coverage amount, the term length, what’s included or excluded, and the monthly cost. While price is important, it's important to try and compare apples to apples. Take life insurance for example, you’ll want to make sure the quotes you’re comparing reflect the same term and coverage amounts.

Clarity matters. You want a policy that’s easy to understand, with no surprises later. Ideally, comparing policies should be as transparent and objective as possible, so you should feel like you're being educated, not sold to.

At the end of the day, the “best” policy isn’t necessarily the one with the lowest premium or the longest term. It’s the one that fits your life, your budget, and your priorities.

This week’s readings:

Released today: New national research from Haventree Bank and Angus Reid took a look at how Millennials are saving. Turns out they are saving regularly but many don’t expect to retire. (Haventree Bank)

I’m putting this here to read but it does feel like colonization so if you do this, respect the citizens because while I won’t speak for all the islands, I can tell you Trinidadians will put you in your place if you act up. Anyway. 11 best Caribbean islands for Canadian retirees ranked. (Money.ca) I should pitch a whole article on retirement and colonization. Editors, hit me up.

The sandwich generation is planning for everyone but themselves (Willful)

From KOHO’s Grocery Gap Report: rising costs are also affecting working and middle-income Canadians. The average grocery spending per user increased approximately 5% year-over-year, trips to discount grocery retailers increased 4.1% year-over-year and discount basket sizes increased 1.6%, compared to 0.9% among premium retailers.

I wish I could move out but my parents need the money (The Cut)

By me: Climate change linked to two-thirds 0f 50,000 summer heat deaths in Europe (Insurance portal)

Are private mortgages an option as BoC turns hawkish? (Rates.ca)

Resurfacing this rant I wrote four years ago. The press releases have gotten much better.