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Top 10 Reasons to Get Critical Illness Insurance


Do you know anyone who has ever had cancer? How about someone who has had a heart attack or a stroke? Alzheimer’s perhaps? Unfortunately, most of us could probably name several people in our family or circle of friends who have been afflicted with one of these illnesses. Many are surviving. Sadly, many are not. But what happens to a family’s financial well-being while they are going through this difficult period. Government health plans help but up to a point. Who pays for treatments not covered by OHIP? What if I have to seek treatment outside of Ontario or Canada? Group benefits help but again, up to a point. If I’m sick, my group plan may pay part of my salary while I’m in the hospital or getting treatment but what about my spouse’s income. Who pays for that if he has to take time off to help me? What about the mortgage and living expenses? It’s easy to see how quickly savings and RRSPs can be depleted in the event of a critical illness.

My mother-in-law was diagnosed with colon cancer this year. It’s the first time this has hit my family directly and it’s a scary time. It has been 8 months since the diagnosis and she’s doing well. The surgery was successful and now she is half-way through her chemo treatments. We’ll see what the future has in store but now I realize that from this day forward whenever a doctor asks my husband or my daughters if they have a family history of cancer, they will have to answer “Yes”. How will I protect them?

Critical Illness Insurance was first developed in South Africa in 1983 by Dr. Marius Barnard who is the brother of Dr. Christian Barnard, the doctor who performed the first successful open heart transplant surgery. We are all aware of life insurance and the need to protect our loves ones in the event of a premature death but Dr. Barnard saw a need for insurance that pays a “living benefit” to offset lost income and to pay for additional expenses incurred by those who survive a major illness. He also found that the survival rates were higher for people who weren’t worrying about their finances during this critical period.

With that in mind, here are the Top 10 Reasons to get Critical Illness Insurance:

  1. With Critical Illness Insurance, 100% of your coverage amount will be paid to you in a tax-free lump sum payment if you are diagnosed with a critical illness and survive the amount of time specified in your policy (eg. typically 30 days).
  2. With a Return of Premium on Cancellation benefit on your policy, you can get all of your premiums back if you never get sick or make a claim. This means you are covered in the event of an illness and you are building a ‘pension/savings’ account for use down the road. Either way, you are protecting yourself and your family’s financial health.
  3. The illnesses that are covered by Critical Illness Insurance, such as cancer, heart disease and stroke are on the rise which means the odds are higher that you will face one of these illnesses in your lifetime.
  4. Ottawa has the highest cancer rates in all of Ontario but also boasts the best cancer survival rates in the province.
  5. Now is the time to lock in premiums while your age and health are in your favour. The younger you are, the less expensive your premiums will be. The healthier you are, the higher the probability that you will be approved for coverage.
  6. Instead of having to work full-time while you are ill, thanks to the insurance benefit you will have the option to work part-time, take time off, or perhaps you may choose early retirement.
  7. Critical Illness Insurance can be used to cover your mortgage or other expenses, such as the salary of a spouse that has to take time off work to help with your recovery or for medical treatments not covered by your provincial health plan.
  8. In most cases employee benefit plans do not offer critical illness insurance and in cases where they do, it is usually for a minimal amount of coverage with no return of premium option.
  9. For children, Critical Illness Insurance also covers childhood illnesses such as Type 1 Diabetes, congenital heart disease, cerebral palsy, acquired brain injury and others. At age 25, it also offers a partial return of premiums paid to date which can be used for things such as education, home down payment, etc.
  10. With a long-term care conversion option, you can convert your Critical Illness Insurance policy to a Long Term Care Insurance policy in the future without providing evidence of insurability. This type of insurance was designed to cover the cost of care over a lengthy period while the insured is unable to care for themselves without someone else’s help.

There are so few things in life that come for free. This is one of them. Regardless of what the future has in store for each and every one of us, a Critical Illness Insurance policy will pay out … either in the form of a policy payout or in the return of all the premiums you paid.

Had you ever heard of Critical Illness Insurance before? What do you think?

Any questions? You can reach me @KatinaMichelis


Photo credit: Alex E. Proimos / Foter.com / CC BY-NC

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  1. My husband has critical care insurance. It’s peace of mind for us just in case of unexpected illness. At the end of 10 years which is soon we’ll get all premiums paid reimbursed to us. It will be a good chunk of money to add to our savings account. Plus it’ll help us pay the higher premiums I assume there will be when we continue the plan for another 10 years.

  2. I have heard about it but we have never purchased it. It does look like something that would be worth looking into. Thanks for the review, I am going to check into this further.

  3. I’ve heard of Critical Illness Insurance, but haven’t looked into it yet. Thanks for the information; you mentioned a few things I wasn’t aware of.

  4. this is a new idea for me but it does sound good. I’m sorry to say that the health system here leaves a lot to be desired compared to Europe. If you don’t have an extra insurance here you don’t even get the ambulance paid for!


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