Whatever our lifestyle, we all face risks – some more perilous than others.

For example, there is less than a one-in-1,683 chance we’ll have a house fire.

And the odds of suffering a critical illness before age 75?

One in three.

Jay Croteau says businesses see value in the critical illness plan.

We all carry fire insurance on the house – who’d be reckless enough to pass on that? – but what about critical illness coverage?

Actually, most people don’t have it.

One reason is cost. It’s expensive. Fortunately, business people have an option that takes advantage of tax regulations and provides coverage for company executives in the event they get cancer or some other serious illness.

If they stay healthy, they receive the money paid individually, tax free.

This is called the Executive Health Savings Plan and it’s only available through Laurentian Financial Services, which put it on the market about six months ago.

The plan works in partnership with Desjardins Financial Security, one of the industry’s preferred providers of insurance. With more than $90 billion in assets, the Desjardins group of companies is well-known in eastern Canada, but less so in the west. “Many business owners are buying the plan because they immediately see the value in it,” says Laurentian representative Jay Croteau.

“One of the most attractive features is getting your money back, tax-free, if you don’t get ill.”

The harsh reality is that some people in their later working years do get ill, and if they haven’t got a plan in place, the outcome can be disastrous. Unlike a salaried employee with defined benefits, a business owner might be relying on his or her own ability to fully perform for financial survival.

So might be the spouse and any dependents.

More odds: There’s a one-in-72 chance of a disability lasting more than two years to age 65. There’s a one-in-727 chance that you’ll die before age 65.

An individual’s calamity might not be a terminal illness.

It could be something completely treatable, but what if you need three months’ rest for surgery and recovery?

“Could someone take over your role in the business?” Croteau asks.

“How would your absence affect sales, employee productivity and your business’s bottom line?”

With Laurentian’s plan, critical illness coverage would immediately kick in so you can relax and get on with regaining your health.

The coverage is being offered to corporations and to owners of small, medium and large businesses – anything from a one-person company on up. Clients would typically include doctors, dentists and lawyers. It’s not tailored so much to regular employee coverage because the price point favours executives.

Here’s how the program works:

The client company and the shareholder jointly purchase a critical illness insurance policy with the health benefit option.

The company pays for the critical illness portion while the shareholder pays for the health benefit portion.

The critical illness benefit is paid to the company. The health benefit is paid to the shareholder.

In the event of a critical illness, the company receives a tax-free lump-sum payment of $500,000 that could be used to hire replacement personnel, including a qualified manager; pay illness-related expenses and fixed business expenses; and cover revenue losses caused by absence from work.

In fact, there are no strings attached to that payment to the company president, for example.

“If he wants to hang out in the Bahamas because he thinks that will make him well, he can do that,” Croteau says.

“The insurance company cuts the cheque. It doesn’t say how it has to be spent.”

The executive health savings plan takes advantage of low corporate taxes, meaning a business owner can afford insurance that would be beyond the means of most individuals. He’s paying the premiums in corporate dollars, not after-tax dollars, as an individual would.

Above all, it’s fine protection for your company – protection that might not seem important until you’re blind-sided by a doctor’s diagnosis.

If you or the CEO become seriously ill without coverage, how would that affect your employees? Would they feel secure pretending everything’s going to be fine, or would they consider it a good time to polish up their resume?

“You could lose some valuable employees during all the uncertainty,” Croteau says.

If the executive continues for 12 years without making a claim, they get back 100 per cent of the premiums paid TAX-FREE individually.

Certainly, he might have made a good return on the stock market if he’d gambled the money that way, but maybe not. And he wouldn’t have had valuable health coverage during those years.

“It’s also a great tax-planning tool,” Croteau says. “It’s like a pension plan without having it structured like a pension plan.”

For further information, call Jay Croteau at 403.265.9770, e-mail jay.croteau@shawbiz.ca or go to www.desjardinsfinancialsecurity.com