Insurance Calculator Quick Quote

What is Critical Illness Insurance?

By April 20, 2020 November 25th, 2022 Advisor, Blog, Consumer, News
What is Critical Illness Insurance

About Critical Illness Insurance

We are becoming more aware that regular changes to diet and exercise can go a long way to extending our lives and even preventing common illnesses. Medical advances are also positively helping to change some of these diseases’ outcomes. We cannot ignore the fact that there is a high percentage of cancer and cardiac disease in our country.

Since Canadians living longer due to today’s medical advances, critical illness rates are also rising.

Critical illness is defined as a life-altering illness. These statistics highlight the prevalence of common critical illnesses in Canada:

  • About 1 in 12 Canadians is living with heart disease.1
  • Approximately 1 in 2 Canadians will be diagnosed with cancer in their lifetime.2
  • About 741,800 Canadian adults live with the effects of a stroke (that’s the population size of New Brunswick!).3

Along with making better lifestyle choices, more Canadians should consider their options for planning for the future. How will you financially protect your loved ones if you were diagnosed with a critical illness? Would you be able to cover costs related to the illness — including medical care, travel expenses or wages of a family member leaving work to help? Critical illness insurance is important in planning for the future and having peace of mind today.

So, what is critical illness insurance you may ask?

Critical Illness Insurance provides a lump sum payment – a living benefit – if you are diagnosed with a specified covered illness.With critical illness insurance you can worry less about finances and just focus on getting better.

As the average life expectancy of Canadians increases, critical illness insurance provides an extra measure of protection to ensure that you can afford the privilege of getting older. A critical illness such as heart disease, cancer, or stroke can be financially catastrophic for those not prepared to handle the various expenses that can arise from treatment and life alterations.

The purpose of this kind of insurance is to cover costs related to the illness that you have. Canada’s Health Care covers many medical expenses, but there are some that it does not cover, such as prescriptions, medical accessories like wheelchairs, and hospital parking. Critical Illness Insurance gives you the extra money to cover these out-of-pocket costs. However, the lump sum can be spent on anything you want since there are no restrictions on how you use the money.

The lump sum received from critical illness insurance can provide relief by helping you with medical care, bringing in additional help at home while you’re undergoing treatment, replacing any lost income, and more. In short, it is there to do whatever you need to help with the costs of a critical illness.

What illnesses are covered by critical illness insurance?

Critical illness is diverse, but that doesn’t mean that your insurance policy will cover all these diseases or conditions. Depending on your insurance provider different illnesses will fall under your policy.

7% of critical illness insurance claims (not all are listed here) include 4:

  • Blindness
  • Major organ transplant
  • Multiple sclerosis
  • Paralysis
  • Parkinson’s disease

However, the vast majority of critical illness insurance claims (over 90%) are represented by cardiac and cancer claims, including 4:

  • Heart disease (Including Heart Attack, Heart Valve Replacement or Repair, Aortic Surgery, Stroke, Coronary Artery Bypass Surgery)
  • Cancer (Including Aplastic Anemia and Benign Brain Tumor)

How does critical illness insurance work exactly?

Some insurance providers will require you to complete a medical exam to qualify for critical illness insurance and determine your premiums. These providers will offer coverage for a range of illnesses you pay premiums for that you may not want or need to be covered. Other insurance providers offer no medical options, and may ask eligibility questions with no medical exam or tests required (this is excellent news if you don’t like needles!).

After this process, your insurance provider will tell you which policies you qualify for. Usually, critical illness insurance lumps major conditions such as cancer, heart attack and stroke all under one policy. This means you may be ineligible if you have had any one of these conditions in the past.

Fortunately, even if you have a pre-existing condition, there are more flexible insurance options on the market, including with Canada Protection Plan, that will allow you to decide if you want to be covered for heart disease, cancer, or both. These flexible options can make your premiums much more affordable.

To benefit from critical illness insurance, you will need to pay premiums throughout the term of your insurance policy. If you pay these premiums, you will receive a lump sum if faced with a critical illness listed under the policy you qualified for.

However, if you pass away during the survival period, your beneficiary would receive the lump-sum if the insured purchased an optional benefit called a Return of Premium upon Death (ROPD). The survival period is the length of time a person must survive after being diagnosed with a critical illness before making a claim.

Factors determining the cost of critical illness insurance

The way insurance providers determine how much your premiums will be for critical illness insurance coverage depends on a few factors. Usually, the cost depends on your age, medical condition, the amount of coverage, the number of illnesses covered by the policy, and the insurance provider.

Family history is another major factor determining the cost of your critical illness coverage. Many critical illnesses have a genetic factor, which means that if you have a family member that has suffered from a critical illness, there is a higher likelihood that you will be diagnosed with the same illness in your lifetime. This can drive up the cost of your critical illness insurance premiums.

We understand that it may be easy to dismiss the idea of getting a critical illness while you’re young and healthy, but waiting can be costly. Thinking ahead is beneficial because getting critical illness insurance when you’re younger, and healthier is easier and less expensive.

Doing so later may make qualifying difficult, or your premiums may be higher. Your ability to qualify and the cost of premiums changes as your health changes. Premiums increase as you get older because your chances of getting an illness also increase.

The best thing you can do is apply for critical illness insurance at a young age, especially if you have a spouse, children, or other family members that would benefit from financial protection. Critical illness insurance can be the difference between financial comfort and financial ruin for your loved ones.

How much coverage do you need?

Your coverage needs are based on your current lifestyle, expenses and financial commitments. When deciding how much coverage you need, think about what wages would be lost if you could not work due to critical illness and any childcare that may be needed. Try this calculator to find out.

With a temporary loss of income and expenses to be covered – this financial security can provide tremendous relief during a most stressful time.

Is it worth buying critical illness insurance?

Progress is being made for better medical technologies, but it is still better to be prepared in case you are diagnosed with a critical illness.

You need to ask yourself if the unexpected were to happen and you were facing a critical illness such as cancer, heart disease, or stroke, how would you and your family stay afloat?

Some workplaces offer a benefits package that may include critical illness insurance. However, the critical illness insurance provided through a group package is typically only enough to cover the basics. Since recovery time can be unpredictable, relying on work benefits or Employment Insurance may not be enough. Typical Disability Insurance won’t cover you if you are deemed able to work; there’s a chance your work benefits may be capped. Depending on your province, Employment Insurance can only last 15 weeks. You may need additional financial help beyond these sources to get through this difficult time.

The possibility of being unable to work due to critical illness means you may need other ways of replacing your salary to pay for your living expenses and financial commitments. If your family depends on your paycheck, then it is probably a good idea to have protection in place in case you can’t work due to a critical illness.

Critical illness insurance is specifically designed with a deep understanding of how being financially prepared can decrease stress during a difficult time in your life. By purchasing critical illness insurance, you will have peace of mind that if you are diagnosed with a critical illness, you will be protected.

Is critical illness insurance right for you?

Critical Illness Insurance can be an important part of your overall financial planning. However, it is only one piece of the puzzle, it is still advisable to look into purchasing life insurance to protect your loved ones.

Canada Protection Plan offers four critical illness insurance options that can provide you with the flexibility to choose the coverage you want and need, all with affordable premiums.

For a no-obligation critical illness insurance quote, speak with your advisor or contact Canada Protection Plan.
Canada Protection Plan logo
Canada Protection Plan is one of Canada’s leading providers of No Medical and Simplified Issue Life Insurance. Our mission is to provide reliable protection and compassionate service from coast to coast with easy-to-purchase life insurance, critical illness insurance and related products. Our expanding product choices will help you get the coverage and peace of mind you need for a better financial future. Canada Protection Plan products are available through over 25,000 independent insurance advisors across Canada.
To learn more about Canada Protection Plan and our line of comprehensive No Medical and Simplified Issue life insurance solutions, call Broker Services at 1-877-796-9090 and we will be happy to assist you or put you in contact with Sales support in your region.

 Advisors, want to be in the know? Join our LinkedIn Group today!
Pour en savoir plus sur Plan de protection du Canada et sur sa gamme complète de solutions d’assurance vie sans exigence médicale et à émission simplifiée, communiquez avec les personnes-ressources des Services de courtage au 1 877 796-9090, qui seront heureuses de vous aider ou de vous mettre en contact avec l’un de nos soutiens aux ventes dans votre région.

 En tant que conseillers, vous voulez être au courant? Rejoignez notre groupe LinkedIn aujourd’hui !
Skip to content
Need Help?Call for a quote.
Get a Quick No-Obligation Quote
Explore our Critical Illness Insurance Plans