If you are diagnosed with a critical illness, your government and employer health insurance plans will cover some of your treatment and recovery expenses, but Critical Illness Insurance has additional benefits you may not know about. Should Critical Illness Insurance be part of your insurance coverage? Read about its advantages below.
What is Critical Illness Insurance?
Critical Illness Insurance is a type of insurance that pays out a lump sum to the policyholder if they are diagnosed with a serious, life-threatening illness such as cancer or Parkinson’s disease.
The insurance payout is made at the time of diagnosis and can be used for any purpose the policyholder sees fit, whether directly related to their illness or not. For example, policyholders can use the payout for:
- Home modifications, such as ramps and no-barrier showers.
- Income replacement for your spouse or partner if they need to stay home to care for you.
- Nursing or PSW care at home.
- Mobility aids.
- Alternative treatments such as acupuncture or therapeutic massage.
- Travel and lodging if treatment facilities are not nearby.
- Extra childcare.
- Mental health care.
What Illnesses Does Critical Illness Insurance Cover?
Plans vary from provider to provider, but most policies cover a basic list of serious illnesses and conditions, including cancer, heart attack, and stroke. Policies may also cover kidney failure, major organ transplant, multiple sclerosis, paralysis, blindness, deafness, Parkinson’s disease, Alzheimer’s disease, coma, and severe burns.
When you’re considering critical illness insurance, it is critical to read your policy carefully so that you’re aware of which illnesses and conditions are covered and which ones are not.
What Does Critical Illness Insurance Not Cover?
In general, critical illness insurance will not cover pre-existing conditions, diabetes, asthma, self-inflicted injuries, minor illnesses or injuries, and injuries or illnesses resulting from dangerous sports, war, illegal activities, or substance abuse.
Who Needs Critical Illness Insurance?
While anyone can potentially benefit from having Critical Illness Insurance, it may be especially helpful for the following people:
If you are self-employed, critical illness insurance can provide financial protection in the event that you are unable to work. Keep in mind that if you are employed now, your employer-based coverage will end if you leave the job; having additional protection in place is something to consider if there is a chance you might leave your job.
Individuals with a family history of certain critical illnesses
This does not mean you will become ill yourself, but having Critical Illness Insurance in place can give you peace of mind. That can go a long way toward lowering your stress level while you’re still well and helping with your recovery if you do become ill.
People with high-stress jobs
Individuals with high-stress jobs, such as dentists, nurses, emergency services personnel, and air traffic controllers, may have a higher risk of developing critical illnesses. For these people, critical illness insurance could be particularly valuable.
People who want peace of mind
Some people enjoy living on the edge, while others feel better when comfortable and safe. Critical Illness Insurance will give you peace of mind knowing that you and your family will be protected if you become ill.
People without a slush fund or emergency fund
If you do not have anything saved up for emergencies, Critical Illness Insurance can serve that purpose for you. You will feel more at ease knowing you will not have to borrow money or dip into your retirement savings. Unlike other types of health insurance, Critical Illness Insurance pays out a lump sum when you are diagnosed; you do not need to pay your expenses upfront and wait to be reimbursed.
What to Look for in a Critical Illness Insurance Policy
To ensure you have the right coverage for you and your family, there are a few questions you should ask:
Does the policy have a Simplified Issue option?
Simplified Issue policies require less medical underwriting, meaning applicants do not have to undergo extensive medical examinations or answer long medical questionnaires to apply for coverage. These policies are appropriate for people with pre-existing conditions, people who need to get approved quickly, and applicants who don’t want to deal with lengthy applications and waiting periods.
What coverage amounts are available?
Depending on your personal situation, you may be looking for a smaller policy or a large one. Check on the policies you are considering to see If they offer the amount you’re looking for.
Which illnesses and conditions are covered?
Some plans only cover a few illnesses and conditions, while others are very comprehensive. Make sure the specific illnesses you want to be covered for are in the policy.
Does the policy have flexible premium options?
Some permanent (whole) insurance policies allow you to adjust your premiums. Other policies will return your premiums if you don’t make a claim. If you think flexible premiums might be helpful to you, check to see which ones are available with the policy you are considering.
How long is the survival period?
The survival period on a policy is a specified period of time that an insured person must continue to live after being diagnosed, typically between 14 and 30 days. The insurance company will not pay the benefit if the insured person dies within the survival period. During the survival period, the insured person must continue to receive treatment and medical care.
Does the policy permit partial payouts?
Some policies allow policyholders to receive one or more partial payouts if they are diagnosed with an illness or condition covered by the policy. The policy remains in place after the partial payout is made.
Can you purchase a policy for a child?
Purchasing a policy can allow you or your partner to take time off work to care for them. You can also use the payout for any other expenses you have, such as travel to and from treatments, hotel stays, and special foods.
No one expects to become critically ill, but it is better to have a plan in place for how you will manage financially if you do. Review your existing insurance coverage, including your provincial health care plan and any coverage you have through your employer. Then take a look at the critical illness insurance plans that are available, and select the one that will give you the right level and type of coverage.
Canada Protection Plan Offers four distinct critical illness insurance plans. As a Canadian-owned and operated company insuring Canadians for over three decades, Canada Protection Plan is dedicated to providing Canadians with insurance coverage tailored to their needs. All of our insurance plans are Simplified Issue and No Medical, so approval is quick and does not require medical exams or extensive questionnaires.
Interested in Critical Illness Insurance? Contact one of our experienced insurance advisors today to talk about your family’s needs and how we can help you meet them.