Critical Illness: What You Need To Know
Updated: May 31
When you purchase critical illness insurance, you typically pay a premium for a set amount of time and, should you be diagnosed with one of the covered illnesses or conditions and live for a specified period of time, you can receive the insurance benefit as a tax-free, lump sum payment.
The number of covered illnesses can vary from product to product, and from company to company, but most plans cover many forms of cancer, heart attack and stroke. As with life insurance, most buyers work with a licensed advisor, like myself, to find the benefit amount and payment terms that work best for them.
In contrast to life insurance, most critical illness insurance policies allow you to return your premium if you stay healthy and don't need the insurance benefit during the term of the policy.
Why do people buy critical illness insurance?
Of course people who buy insurance have their own, unique reasons for doing so, here are a few of the most common when it comes to critical illness insurance:
Family history of serious illness
Need to support spouse or other dependent
Need income replacement but not eligible for disability insurance
Want freedom to go outside public healthcare system if possible
While these factors are different, they all share the same underlying anxiety of financial ramifications of dealing with a serious illness.
Who needs critical illness insurance?
While Canadians may not receive the shock hospital bills that many Americans have to deal with as result of a surgery and other in-patient treatments and care, people diagnosed with a critical illness in Canada may need to pay out of pocket for expensive prescription drugs and/or the unexpected costs associated with seeking treatment outside of their province or in another country.
Even if the best course of treatment is available close to home, there are many new expenses to consider that are not covered by the public system or the group healthcare coverage offered by employers.
These additional expenses include:
Transportation and parking: the cost of getting to and from hospital and other appointments if one is unable to drive is often far most expensive than people anticipate.
Help around the home: those being treated for and recovering from a serious illness often find they need assistance caring for their homes and families.
Food and meals: there are a lot of options these days for meal kits, pre-cooked and home delivery. One thing they all have in common is that they are not cheap.
Time: most costly of all, potentially, is the lost time that could otherwise be used to earn a living.
Ask yourself this: “What’s my financial plan if I am unable to work for a month, six months or even a year?” If you don’t have an answer then you may be someone who could benefit from critical illness insurance.
Most likely, it has happened to someone you know
According to the Canadian Cancer Society, nearly one out of every two people in Canada will be diagnosed with cancer at some point in their lifetime[i]. There hasn't been much change in that statistic over the last decade. Thankfully, survival rates have improved significantly for several of the most common types of cancer.
If you think critical illness insurance may be right for you, let's arrange a meeting to find out if you qualify and I'll help you find a plan that works for your unique circumstances.
The information contained in these articles are for general information purposes only. Nicole Marques assumes no responsibility for errors or omissions in the contents of the Service. In no event shall Nicole Marques be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the information provided in this article. Nicole Marques reserves the right to make additions, deletions, or modifications to the contents on the Service at any time without prior notice. The information provided above is for general information only. It is not to be relied upon as providing legal or tax advice. You are encouraged to consult with a professional tax and/or legal advisor and/or financial advisor about your particular circumstances.
\[i] “Cancer Statistics at a Glance,” Canadian Cancer Society: www.cancer.ca/en/cancer-information/cancer-101/cancer-statistics-at-a-glance/