Is critical illness insurance worth it in Canada?
For the average Canadian family, critical illness insurance is worth it because the tax-free lump sum payment you would get would offset additional expenses and provide financial security during a tough time.
Here's what to consider when weighing whether critical illness insurance is right for you.
You likely need critical illness insurance to financially protect you and your family, in the event that you get sick. It is a tool to help cushion the financial impact a life-threatening diagnosis can have on your income.
You might be thinking: "What are the chances I'll actually develop a critical illness?" Suffering from a serious illness may seem unlikely, especially while you're still young. But it's more common than you think:
2 in 5 Canadians will experience cancer. Over 10% of hospitalizations in the country are due to heart conditions, stroke and vascular disorders. 1 in 10 Canadians have a neurological disorder, with rates expected to increase.
Critical illness insurance is more affordable than you think. See how much critical illness insurance might cost you with PolicyMe.
We cover more conditions than any other Canadian insurer; including coverage for more cardiovascular and cancer conditions.
Critical illness insurance can cost around $40 month for a non-smoking 45 year old woman ($50,000 in coverage over a 10 year term).
The cost of critical illness insurance depends on the following factors.
Because there are so many variables involved, it isn't easy to give a definite ballpark figure as to how much your critical illness insurance premiums will cost. Generally speaking, critical illness insurance in Canada can cost as little as about $15 a month and up to $100 a month or more.
At PolicyMe, you can buy critical illness coverage on its own or bundled with term life insurance. Applying for both types of insurance coverage takes 20 minutes or less to complete. And you find out if you're approved right away!
A typical critical illness insurance policy in Canada will cover around 20 serious conditions, including stroke, cancer, organ failure and heart attacks.
Some of these plans will also offer a partial payout for “early-diagnosis” conditions, illnesses where full recovery is likely if it’s caught at an early stage. Trimmed-down critical illness insurance plans will only cover around five illnesses.
Here's a quick rundown of which companies offer the most coverage:
The case for more basic critical illness insurance policies is that they have cheaper monthly premiums and are easier to qualify for. But generally a list of fewer conditions are covered.
Based on your risk tolerance, you may find this trade-off worth it. And some protection in place is better than none at all.
On the other hand, you may think that if you’re going to buy critical illness insurance anyway, you may as well pay a slightly more expensive premium for more robust coverage i.e. more conditions covered, both series and early stage conditions.
There are many critical illness insurance plans, so it’s important to review the terms and conditions carefully to ensure they provide the type of protection you’re looking for.
Also be sure to review your policy in detail before you sign it.
There are some significant differences between life insurance and critical illness insurance.
Both types of insurance serve as a safety net for you and your family in a worst-case scenario. But they protect against different events.
Having both critical illness and term life insurance can give you the peace of mind you’re looking for, knowing that you and your family are financially protected no matter what.
PolicyMe offers some of the most affordable term life insurance premiums in Canada, with a critical illness rider covering 44 conditions – more than any other plan in the country – at rates comparable with those at other insurers.
If you’re hit by any of the illnesses covered on our list, we’ll pay out a tax-free lump sum for you and your family so you can worry about your recovery, not your finances.
There are some similarities between critical illness insurance and disability insurance.
Critical illness and disability insurance both protect against an unexpected event by providing a monetary payout. But that’s where the similarities end.
While there’s some overlap between the two types, critical illness and disability insurance protect against different types of illnesses.
Here is a look at what the most complete critical illness insurance is in Canada:
If you’re diagnosed with a critical illness/condition, PolicyMe gives you a lump sum payout to financially help you and your family while you can't work. So that you and your loved ones can focus on what matters most: your recovery.
If you’re diagnosed with a critical illness that's covered by your plan, you generally have to wait 30 days to submit a claim. This is the industry standard waiting period, but it’s not mandatory at all insurers.
For example, at PolicyMe, there is no waiting period to submit a claim on 57% of the 44 conditions we cover, including all cancers. There is a 30-day waiting period for all cardiac-related conditions.
Coverage amounts range from $5,000 to $1M, which you choose at the time of enrolment. If you are diagnosed with a critical illness covered under your plan, a tax-free lump sum will be paid to you via cheque or deposited in your bank account about a month after your claim is approved.
If you have critical illness insurance but never experience a critical illness, consider yourself lucky! Your term will simply expire, and your coverage will end.
However, if you have a “return of premium” rider on your plan, you can request that your premium payments be returned at the end of your policy term. Of course, you will have to pay extra for this benefit, but some people like knowing that a portion of the money they paid into the plan will be refunded if they never make a claim.