Worry about your health, not your pocketbook

When you’re diagnosed with a serious or life-threatening health issue, the last thing you want to worry about is finance. You need to focus on your health and, with a few changes to your portfolio to ensure you have sufficient cash flow, that’s exactly what you can do.

“If [you] had invested heavily in equities, moving some of the money to a low-risk, [liquid] investment, such as money market or a daily interest account will provide access to additional funds,” says Mark Schultz, an advisor with Sun Life.

John Cairns, CFA and regional vice president of Western Canada for Scotia Private Client Group, suggests keeping the equivalent of approximately six months’ worth of monthly expenses in a cashable GIC, money market account, or similar liquid investment.

“Six months will give [you] enough time to figure out what expenses will be needed,” he says. “Another six months of expenses can be transferred to the liquid investment at a later date. Leave the rest of the portfolio in the existing direction.”

Because the health issue will likely impact your future earnings, you may also want to consider lowering the risk exposure of your portfolio. One way to do so, says Cairns, is to shift your portfolio to strictly Canadian equities, removing the risk of foreign currency and global market volatility, while still providing adequate asset growth.

In addition to portfolio changes, you’ll want to review what insurance coverage you can access. If you have critical illness insurance and your condition is covered, begin a claim immediately as there is often a waiting period for coverage.

You may also have a group benefits policy that provides short or long-term disability insurance. If so, with some additional paperwork, you could qualify for continuing income of about 60% of your current salary, with a typical waiting period of two weeks.

Finally, determine whether you have any supplemental medical insurance, which can cover medical and living expenses directly related to your condition.

Lisa MacColl is an Ontario-based financial writer.