Critical Illness Insurance
Critical Illness Insurance: Is it Worth the Cost? (2023)
October 27, 2022
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7 minutes
The best critical illness insurance in Canada comes from PolicyMe, Sun Life and Manulife.
42% of Canadian parents have just one month or less of expenses in emergency savings. And the financial strain of additional bills and taking time off work can add stress on top of a serious diagnosis.
Finding the best critical illness insurance for your situation is key, so we've reviewed each major provider in Canada.
Most major insurance companies in Canada offer critical illness insurance coverage.
Which critical illness insurance that is the best for you will depend on:
Here are some reviews on some of the biggest names in critical illness insurance and what they have to offer.
Reviews.io score: ★★★★★ (4.83)
PolicyMe offers the most extensive critical illness coverage in Canada, covering 44 critical illnesses and conditions. Most other leading competitors in the space cover 34.
We offer flexible coverage options: you can choose from $5,000 to $1M in coverage, with a term length of 10 to 30 years; similar to our term life insurance offerings. Which you can apply for at the same time, because we value keeping things simple and easy for the customer.
Your PolicyMe policy also includes coverage for more cardiovascular and cancer conditions than any other Canadian insurer.
We're all about providing fast financial relief for you and your family. There’s no 30-day waiting period after diagnosis to submit a claim for 25 of 44 conditions, including all covered cancers.
Which means you'll receive a lump sum payment without the long wait, so you can focus on your recovery.
The application process is quick and simple. With our streamlined, digital-first approach, you can get an instant quote for critical illness insurance, apply in 20 minutes. And find out if you’re approved right away.
InsurEye score: ★☆☆☆☆ (1.3)
One of Canada’s largest insurance companies, Manulife offers several critical illness insurance options.
Lifecheque is their most extensive and flexible policy, with a list of 24 critical illnesses eligible for coverage. If you’re diagnosed with any of the conditions on the list, you’ll receive a payout as long as you’ve fulfilled the required waiting period.
For another 6 conditions, you may be eligible for a partial payout if you’re diagnosed early.
CoverMe is a simpler policy that offers up to $75,000 coverage for those between 18 and 65. The policy will stay in effect until you turn 75.
CoverMe coverage is pretty affordable – a 35-year-old non-smoking male will only pay about $27 a month for a $75,000 plan. And a medical exam or questionnaire is not needed for approval.
But beware: this type of policy only covers 5 major illnesses, so it's an "affordable" option for a reason.
You can get an online quote for CoverMe but you’ll need to go through a Manulife advisor in order to obtain any information or start the enrolment process for Lifecheque.
For all the plans, you have the option of purchasing a “return of premium” rider for an additional cost. This means you can request the return of the premiums you’ve made towards your critical illness policy provided you’ve never made a claim.
InsurEye score: ★★☆☆☆ (1.7)
Canada Life has a critical illness insurance package that covers just 25 illnesses for a 10 or 20-year term (or up to 75 years old). But coverage can go up to up to $3 million.
Depending on the coverage you select, you may be eligible for additional benefits, like access to medical specialists, counselling services, and legal advice.
But these perks come at a hefty price: you can expect significantly higher premiums for this type of enhanced coverage. The sentiment online is that Canada Life's value for money for their critical illness insurance is rated at just 1.5 stars out of a possible 5 (InsurEye).
Like Manulife, they offer a return of premium rider, so under certain conditions, you can get your money back if you never make a claim.
Unfortunately, there isn’t a lot of information about their critical illness insurance products online. So If you're interested in a Canada Life critical illness insurance plan, you'll have to go through an advisor or broker to learn more.
And their lacking in online experience doesn't end there, you're also not able to apply for this type of coverage online at all.
InsurEye score: ★☆☆☆☆ (1.0)
Another major insurance provider in Canada, Sun Life offers two types of critical illness coverage: comprehensive and express.
Under their comprehensive coverage (called Sun Critical Illness insurance), you’ll be fully protected against 26 serious illnesses.
They also list eight less severe conditions under which you’d receive a partial payout.
They’re available in a renewable 10 year term, a term that covers you up to 75 years old, or a lifetime policy. Coverage ranges from $25,000 to $ million, with riders including return of premium.
If you're interesting in learning more about Sun Life critical illness insurance or applying for coverage, you must do so through an advisor.
Express Critical Illness is a more paired back plan, without the bells and whistles. This policy can cover between 1 and 7 life-threatening conditions, with a coverage amount of $25,000 (for their basic or enhanced plans) or $50,000 (for their comfort plan).
For Sun Life's Express Critical Illness policy, you can be approved online without undergoing a health exam or submitting bloodwork results. Of course, the tradeoff is a lower coverage amount and fewer insured illnesses.
InsurEye score: ★☆☆☆☆ (1.0)
Known as one of the Big 5 banks in Canada, BMO offers relatively a typical critical illness insurance policy.
They come in two types: a term plan or a permanent plan.
The term plan has renewable coverage at 10 or 20 years. And if you choose a term plan, you can convert it to a permanent one later.
Their permanent critical illness insurance option provides coverage until you're 75 or 100 (you pick which age).
Both cover 25 critical illnesses, with an additional seven serious conditions if you’re diagnosed early.
If you’re a 35-year-old, non-smoking man, you can expect to pay about $45/month for their 20-year term policy and about $85/month on the low end for a permanent one. Which is not a very competitive rate, given their limited number of covered conditions.
Like their competitors, they also offer a limited critical illness insurance plan that covers far fewer conditions (in this case, heart attack, stroke or cancer). For this policy, you're eligible for a cash benefit of up to $50,000, with premiums of about $17/month as a 30-something non-smoker.
You can get a critical illness insurance quote online through their website, but the application process will require a phone call.
On the subject of critical illness payouts, one customer review states: "I made a $10,000 Critical Illness claim with BMO over 3 years ago and still have not been paid out! [...] I've contacted them several times, got weak apologies and was made to fill out the same claim forms I did originally to start the process all over."
Critical illness insurance is a type of policy used to protect you if you're diagnosed or afflicted with a serious condition that's possibly life threatening.
Different critical illness plans will cover different medical issues, but some typical ones include stroke, heart attack, cancer and organ failure. These are usually covered in most critical illness insurance policies.
Your insurer will pay you a tax-free lump sum if you're diagnosed with a critical illness on their approved list.
You can use this money however you wish: to pay your bills while you're off work, to cover treatments, medical expenses or to supplement income.
The average Canadian might need critical illness insurance coverage. If you’re relatively young and healthy, it’s hard to see why it’s a necessary expense. However, like all insurance types, it’s protection against a worst-case scenario.
Do you have people in your life who depend on your income for financial stability? Being "critically" ill often means not being able to work. And for most of us, taking off work or paying for extra medical expenses can be financially devastating.
Here’s a list of people that might need critical illness insurance:
If you’re unexpectedly diagnosed with a serious illness, a critical illness insurance policy can provide you with the money you need to make things easier on you and your family. The funds can be used to pay for home care, specialized equipment, or medication and treatments that aren’t covered by your healthcare plan.
As a rule of thumb, we tend to advise getting covered for an amount between 3 to 6 months of their post-tax income.
You may be wondering how to buy critical illness insurance that best fits your needs. Here are five easy steps to help you get started.
If you end up diagnosed with a serious illness covered on your policy’s list of conditions, you’ll file a claim, and your insurer payout a tax-free lump sum.
Once you’ve received the money, your coverage ends; it’s good for one payout.
If you never end up having to make a claim, you may be eligible to have a portion of your premiums refunded to you once your policy term expires. Read your terms and conditions documents carefully to see if this applies to you.
Apply for the most complete critical illness coverage in Canada in 20 minutes or less. You can also apply for some of the best life insurance in Canada at the same time; we offer some of the most affordable term life insurance in Canada.
Here is a list of conditions covered by PolicyMe's critical illness coverage:
If you’re diagnosed with one of the above conditions, PolicyMe provides you with a lump sum tax-free payout to cover any expenses for you and your family while you’re temporarily off work so that you can focus on what matters most: your recovery.
Critical illness insurance won't cover conditions that aren’t on the list of approved illnesses as defined by your insurer. Unfortunately, this does mean you could be diagnosed with a life-threatening condition but aren’t eligible for a payout under your critical illness plan.
For this reason, many people who opt to purchase this type of insurance will prefer an insurer that offers more robust coverage (i.e. a longer list of conditions). However, plans that cover more illnesses generally have more expensive premiums, so you’ll have to weigh whether this trade-off is worth it.
And critical illness insurance will probably not cover pre-existing conditions. You won’t be able to buy a critical illness policy after being diagnosed with a serious disease and receive a payout for it.
Even if you make a full recovery, you’re entitled to your critical illness insurance payout as outlined by your policy conditions. In fact, that’s what a critical illness policy is designed for: to give you the financial cushion you need to take care of yourself.
You can use the payout for the thing you need to facilitate your recovery, cover any outstanding bills while you’re off work, or help support your family.
Return of premium benefits for critical illness insurance allows you to request a refund of the premiums you’ve paid into your plan, as long as you haven’t made a claim. In many cases, it’s an optional rider you can purchase for your critical illness insurance policy.
However, by including a return of premium rider, your premiums will become more costly. Depending on the price of the rider, it may not be worth paying for - you could invest the difference and potentially come out ahead.
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