In Canada, a critical illness insurance policy helps pay costs associated with a life-altering illness and is received as a lump sum cash payment.
Essentially, a critical illness insurance policy helps you recover from a serious illness, condition, or disease, while maintaining your family’s lifestyle and financially stability.
The purpose of this FAQ blog post by Benefit Strategies, is to offer answers to some very basic questions about Canadian critical illness insurance.
For more information about how critical illness insurance may fit into your benefits plan, please contact our Edmonton Benefits Brokers directly at 1-780-437-5070.
Frequently Asked Questions
What is a critical illness?
Each critical illness insurance policy is unique but common critical illnesses may include:
- Heart Attack
- Life threatening cancer
- Major organ transplant
- Total deafness or blindness
- Loss of speech
- Severe burns
- Parkinson’s Disease
- Alzheimer’s Disease
Why do I need critical illness insurance?
A critical illness insurance policy will ensure that you have the financial resources should you get sick and are unable to earn an income for any period of time.
Here are just four ways a Canada critical illness insurance policy could help you:
- Pay for financial obligations – Including you mortgage, car payments, credit card debt, and so on.
- Keep your independence – Make any modifications to your home or vehicle, or hire a caretaker to help.
- Pay for medical services – Help offset costs for medication or treatments not covered by your Provincial Healthcare provider.
- Relieve the pressure – Gives you the freedom to spend your time however you think may be most conducive for recovering, including spending time with family.
Is critical illness insurance worth it?
The answer to this question is personal. Everyone places a different value on their peace of mind, knowing they are financially secure in the event of becoming sick or incapacitated. Other people may prefer to forego insurance premiums and would rather save up a rainy day fund to cover critical illness expenses, should they occur. When deciding how you feel about critical illness insurance keep in mind that most Canadians have a reasonable probability that they will develop a critical illness by the time they are 65.
What affects critical illness insurance cost?
There are a number of considerations that can affect the cost of critical illness insurance rates:
- Pre-existing conditions
- Amount of coverage
- Smoking and drinking status
- Health history
- Current health
- Family History
Can I get combined life and critical illness insurance?
Many Canadian insurance companies offer disability insurance and critical illness insurance together. These bundled or combined disability and critical illness insurance policies can often help you save money over time.
What’s the difference between disability and critical illness insurance?
There are three main differences between disability and critical illness insurance:
- Critical illness insurance pays out as a lump sum and typically sooner than disability insurance.
- Critical illness does not require proof of income while disability insurance does.
- Critical illness insurance policies are typically less expensive than disability insurance.
Disability insurance protects your income against the risk of a disability that would prevent you from working. Disability insurance will only pay out a portion of your income, until you are able to return to work.
Critical illness insurance however, pays the benefit after a diagnosis of a serious life-altering illness, regardless of whether you have a current income or not, or if you are able to work or not.
Is critical illness insurance taxable?
A critical illness insurance benefit payout is usually not taxable and comes in the form of lump sum payment, for you to spend in whatever way you wish.
Furthermore, any employer-paid critical insurance premiums are not a taxable benefit to the employee.
Have More Questions About Critical Illness Insurance?
At Benefit Strategies Inc., critical illness insurance is just one aspect of our executive benefit solutions to help balance the benefit requirements of owners and managers.
If you have more questions about critical illness insurance in Canada, please call 1-780-437-5070 to speak with one of our executive benefit advisors today, or contact us online for a free Consultation.