The Value of Critical Illness Insurance

June 19, 2020


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If you or someone you love gets sick, you’ll probably be faced with all kinds of challenges. Your financial situation doesn’t have to be one of them. Critical Illness Insurance gives you the freedom to focus on what matters most, and get better without going into debt.

What is Critical Illness insurance?

If you get sick, Critical Illness (CI) insurance will reduce your financial stress, help you maintain your lifestyle, and let you focus on getting better.

How did this product come to be? Well, a doctor named Dr. Marius Barnard was a heart surgeon who was part of the team that performed the first human-to-human heart transplant in South Africa in 1967. He saw that, while he helped many patients make a full recovery from their illnesses, they struggled with associated financial difficulties for many years to follow.

In 1983, Dr. Barnard, along with the help of a South African insurance company called Crusader Life, introduced the Critical Illness product to the market. CI was designed to allow people to focus solely on getting better after they’ve experienced a significant medical event, without worrying about finances.

This insurance is so important because the benefit amount can be used however you want. You can:

  • Pay for additional medical care (in Canada or abroad)
  • Pay off financial obligations
  • Take a vacation with family
  • Use it to maintain your lifestyle

…or anything else that helps ease your burden during an already challenging time.

We could go on and on about CI, because it really is a fantastic insurance option. Whatever you need most in that moment is what you’ll get.

How it works:

Critical Illness (CI) insurance is a living benefit, so it pays out a lump sum of tax-free money if the insured is diagnosed with a covered, life-threatening condition.

There are different types of policies that expand the number of covered conditions, however the primary covered conditions (which account for approximately 85% of all claims) include:

  • Heart attack;
  • Stroke; and
  • Life-threatening cancer.

Learn more about our specific coverage and policy options.

Critical Illness insurance for kids

Taking out a critical illness policy for your child can help guarantee their insurability into adulthood. This is so important, because health can change at any time, and getting insurance later in life isn’t a sure thing.

A CI policy for your child also means that if your child did get sick, you or other family members could take time off work to care for them without the financial burden that comes with leaving a job or reducing work hours. And, just like if an adult were to become ill, you can choose to use the benefit from your child’s Critical Illness insurance however your family needs to.

Is Critical Illness Insurance worth it?

Yes, Critical Illness insurance is absolutely worth it. It gives you financial freedom and peace of mind during a difficult time, and if you don’t use it, your premiums could be paid back to you.

Most CI policies have a great ‘Return of Premium’ feature. This means that if you don’t end up using your insurance (in other words, you don’t make a claim), at the end of the contract term, you’ll get back all of the premiums you paid. So, even if you never use your CI insurance, you’re no worse off by having it!

(“End of term” can be when your policy expires– typically age 75 for adults or 25 for children– or when the insured passes away, where the premiums would be paid to a beneficiary. Every insurance company offers slightly different policy wordings, so be sure to talk to our Insurance Advisor to find the best option to meet your needs.)

We’ll be honest, Critical Illness insurance is one of those things that you buy hoping that you don’t ever need to use. But, if one day you go through the unimaginable and you realize that you do need to use it, you’ll be so glad you have it.

When to buy critical illness insurance

There are no specific trigger points for purchasing, but in general, the best time to buy a Critical Illness insurance policy is when you’re young, healthy, and can afford the premiums!

Rates are lower the younger you are, and you’ll lock in your rates for the duration of your term, so it’s always a good idea to start sooner than later. (This holds true for all types of insurance!)

That said, people choose to buy CI policies at many different points in life, like when they:

  • Graduate from post-secondary education;
  • Get married;
  • Start having children; or
  • Get divorced.

Time for Critical Illness insurance? We can help.

Read more on our Critical Illness insurance coverage options, or contact us to get started. We’ll get to know you and your values, and provide a custom quote based on that.