Critical Illness Insurance

When someone is diagnosed with a critical illness, the financial burden can be substantial. Critical illness insurance is meant to help alleviate this burden by offering a tax free lump sum payment upon diagnosis. Protection amounts range from $10,000 to $2,000,000.

History of Critical Illness

Critical illness insurance was founded in 1983 by Dr. Marius Barnard in South Africa. As a heart surgeon, Dr. Barnard noticed that financial issues often hindered the recovery of his patients. Since 1983, critical illness insurance has continued to gain acceptance and popularity in several countries including Canada.

Why do I need it?

The good news is that with advances in medical science, more and more people are surviving critical illness. As such, it has become increasingly important to consider the financial hardships that may occur should you be faced with a critical illness in your lifetime.

Consider the following statistics related to the three major illnesses covered:

  • 50,000 Canadians suffer a stroke each year, and 75% survive a first stroke.
  • 82% of victims survive a first heart attack, and 50% of victims are younger than age 65.
  • One in three Canadians will develop cancer in their lifetime. *

Aside from stroke, heart attack and cancer, there are a number of illnesses that may be covered under a critical illness policy, including but not limited to:

  • Alzheimer’s Disease
  • Paralysis
  • Severe burns
  • Coma
  • Multiple Sclerosis
  • Kidney Failure

Benefits and Features

With most policies, you choose how you spend your lump sum. There are a number of costs that may be associated with critical illness including:

  • Cost of treatment.
  • Lost income after time off from work.
  • Home modifications to improve accessibility.
  • Medical services not provided by public health plans.
  • Debt incurred during illness.
  • In-home assistance. 

Critical illness benefit will be paid in a lump sum of up to $2,000,000 tax free for any of the illnesses or conditions covered by your policy. Each insurer has specific definitions and waiting periods (often between 30-90 days) that will have to be satisfied.

Added benefits:

Return of premiums benefit provides a refund of all the premiums you have paid under the policy at maturity. With most policies, should you choose to cancel your coverage, you will receive a partial refund of the premiums paid up to that point.

Return of premiums upon death benefit pays your beneficiary a refund of all the premiums paid under the policy if you die while covered by your policy.

With critical illness insurance, financial worries can take a backseat while you focus on making a full, speedy recovery. Contact an Alliance advisor and make critical illness insurance a part of your financial plan today.

*Sources: Canadian Cancer Society, Heart and Stroke Foundation of Canada