This article is to help provide you with insight on what critical illness insurance is, how the policies work, and how they should fit in your financial plan.

No one has ever made plans to get sick, but if something unexpected happens, you can help yourself and your family by being financially prepared.

Critical illness insurance plans are designed to provide financial support before, during and after treatment. This is accomplished by providing a tax free, lump sum benefit when diagnosed with a critical illness (typically 30 days after diagnosis).

You may be quite surprised to learn how common critical illness diagnoses are in Canada. Everyone seems to know someone close to them that has suffered from a critical illness and the implications it has caused. Here are some quick tidbits to give you an idea how common critical illnesses are in Canada,

  • 1 in 3 Canadians will develop cancer in their lifetime
  • 1 in 9 women will develop breast cancer
  • 1 in 3 women and 1 in 2.5 men will develop cancer in their lifetime
  • 1 in 4 Canadians will contract some form of heart disease
  • 75,000 Canadians suffer from heart attacks each year
  • 1 in 2 heat attack victims is under the age of 65
    (Source: The Canadian Cancer Society and The Heart and Stroke Foundation)

A critical illness policy provides coverage for up to 25 different illnesses depending on the insurance carrier that you are applying with. The main three covered conditions are heart attack, stroke and life threatening cancer.

You will receive a lump sum, tax free payout typically 30 days after being diagnosed. Your policy will define the amount of the payout (e.g. $100,000). This payout can be used to cover unexpected medical expenses, modifications to your home, travel costs and lost wages instead of drawing from retirement savings, equity in your home, savings or relying on credit. A critical illness policy essentially provides an insurance wrapper around the investments that you have worked so hard for throughout your lifetime.

There are many different ways that a critical illness policy can be structured. You can have a straight forward term policy where your coverage amount and premium costs are fixed for a period of time. You can also have a policy where you receive 100% of the premiums that you paid back after 15 years in the event that you do not make a claim. Banks cannot offer these types of products.

Contact us with any questions that you may have regarding existing critical illness plans or if you are looking to apply, we are here to help.

West Coast Life Insurance
Email – simon@westcoast-lifeinsurance.ca
Phone – 778-484-2683