Gillian (42) has asked you about Critical Illness (CI) insurance. She understands the basic concept but she is unsure whether she needs the coverage given she has more than $325,000 in her registered retirement savings plans (RRSPs). Gillian believes that her RRSP savings will be more than ample to cover the costs of care should she become critically ill. Which of the following statements is correct?

a) Funding care for a critical illness from the RRSP would be tax efficient because income would be low.
b) Funding care for a critical illness from the RRSP would be less advantageous from a tax perspective.
c) Funding care for a critical illness from the RRSP is not permitted unless hardship can be proven.
d) Funding care for a critical illness from the RRSP is the best option, regardless if the client has CI insurance.

Answer rating: 100% (QA)

B Funding care for a critical illness from the RRSP would be less advantageous from a tax perspec... View the full answer