Discover why the majority of Canadians are interested in critical illness insurance. Learn what it entails, who can benefit from it, and how you can purchase it.

Critical illness insurance gives you a big lump of cash in case you’re diagnosed with a severe illness that’s covered by the policy, such as paralysis and cancer. This money can enable you to settle any bills immediately instead of disability insurance, which pays you continuously. You can utilize this money for anything you want, including going for a special trip or paying for home care. This insurance is a darling of many Canadians because they can benefit from it when they need it the most.

 

What is critical illness insurance?

Critical illness insurance gives you a big chunk of money if you’re diagnosed with a critical sickness. It’s not intended to replace your job income, as with disability insurance. Instead, it helps you pay for your needs while caring for your sickness. You can use the money for various things, including redesigning your house to make living more accessible, paying medical bills, or helping at home. You could also use it for entertaining activities, such as learning to fly a plane, traveling, or even donating to charities. You can use the money however you wish since there are no rules limiting the usage of the funds.

 

What is covered under critical illness insurance?

Different critical illness insurance plans offer various kinds of coverage.

To understand what is covered in the plan, you need to check the contract, which specifies which illnesses are covered. In general, about 26 diagnoses qualify for coverage. These include common conditions such as Parkinson’s disease, multiple sclerosis, stroke, heart attack, and cancer. This clarity ensures policyholders understand what conditions are eligible for financial assistance in the event they are diagnosed with a critical illness.

If you’re looking for specific coverage, it’s important to compare different plans. However, you can’t select individual types of coverage separately. Critical illness insurance is sometimes included in workplace group benefits. In such instances, the employer decides on the coverage provided to their employees.

 

What are the rates and eligibility for critical illness insurance?

Like other life insurance options, the cost of critical illness coverage depends on various factors, including age, family medical history, health, and the policy’s terms. Basically, critical illness coverage is sold in 10-year increments up to ages 75 or 100. Additionally, you might have the choice to secure your premiums at a specific rate.

Typically, the cost of your coverage increases with age. Health is the primary factor considered when it comes to eligibility since people are required to offer information concerning their current and past health, along with family medical history, through a health questionnaire. The application might not be approved if the details indicate a critical sickness.

Once you get approval, you’ll stay covered as long as the policy is active, even after making a claim. For instance, if someone is treated for and recovers from one type of cancer but later gets a different kind, the second claim will probably be paid as long as it’s not related to the first one.

The rate you pay can also depend on how much money you’ll get if you make a claim. Critical illness insurance can pay out different amounts, ranging from $10,000 to several million dollars. Policies with bigger payouts will cost more.

 

Who should get critical illness coverage?

While Canada’s universal healthcare system caters to various medical needs, it doesn’t cover everything. Things such as prescription drugs, particular treatments, and home care require out-of-pocket payments. Critical illness insurance can help ease the financial burden in such circumstances. It can also help with end-of-life expenses or any other expenses you may have.

Some employer plans include critical illness insurance, but self-employed people and freelancers are often excluded from this benefit. So, it might be even more essential for those who work for themselves to consider it. Parents, especially, might want to protect against unexpected costs.

Critical illness insurance helps protect you and your family from overburdening costs if you’re diagnosed with a severe illness. Unlike disability insurance, it doesn’t pay regularly but provides a significant sum of money when you really need it.

 

Critical illness and death

If the critical illness insurance policyholder passes away, any approved benefit would be passed on to their estate.

How to obtain critical illness coverage?

If you’re buying critical illness coverage (not through a work plan), you must choose an insurance company. You can find CLHIA member companies on their website, ask family for recommendations, or search online. Make sure the company is registered and licensed to sell critical illness insurance, which is normally sold with disability and life insurance.

After choosing a provider, you can discuss your policy details, like its duration and payout amount. You can also add extras, like a rider for losing independence or one for waiving premiums if you get hurt. Remember, you’ll need to fill out a health and family history questionnaire. Your agent can assist you in finding the right balance between premiums and coverage for your needs.

 

Making your claim

If you get diagnosed with a critical illness that your policy covers, your doctor has to send the diagnosis to your insurance company. These kick off your claim process.

Imagining getting a critical illness diagnosis is tough, but it happens to many Canadians. Critical illness coverage helps lessen the worry about such life-changing events. It makes sure you’re more ready to face them.