Critical Illness Insurance Revisited

November 21st, 2009 | by admin |

Critical illness insurance is still a huge seller for Canadian financial advisors and financial planners. We’ve written on critical illness insurance in the past, but here’s a recap of some details on these products, as provided to us by the financial planners selling them.

Our society is living longer, and that’s good news for all of us. But that doesn’t mean our longer lives are free from health complications. In fact, you have a greater chance of getting a critical illness before you’re 75 than you do of dying. For example, women have a 1 in 9 chance of developing breast cancer, they only have a 1 in 27 chance of dying from it, and men have a 1 in 7 chance of developing prostate cancer, and only a 1 in 26 chance of dying from it.

The majority of people who are diagnosed with a critical illness before age 75 recover and get on with life. But the challenge for those affected by critical illness are the unexpected costs. These can include medicine the government doesn’t cover, travel to and from medical appointments, and costs for help you may need at home. Eligible costs can also include time off work for yourself or a caregiver (e.g. your spouse).

Introducing critical illness insurance

That’s where critical illness insurance can help. Depending on the plan you choose, critical illness insurance can provide a cash benefit ranging anywhere from $25,000 to $2,000,000. You can spend this cash benefit as you like if you’re diagnosed with any of the covered conditions and you survive the waiting period (30 days in most cases).

Covered Conditions

Plans vary, but commonly covered conditions include:

  • Cancer
  • Coronary Bypass
  • Heart Attack
  • Stroke
  • Alzheimer’s Disease
  • Aortic Surgery
  • Benign Brain Tumour
  • Blindness
  • Coma
  • Deafness
  • Heart Valve Replacement
  • Kidney Failure
  • Loss of Limbs
  • Loss of Speech
  • Major Organ Transplantation
  • Major Organ Failure (on waiting List)
  • Motor Neuron disease
  • Multiple Sclerosis
  • Occupational HIV Infection
  • Paralysis
  • Parkinson’s Disease
  • Severe Burns

A range of options

Insurers have added some interesting options with critical illness insurance policies, including recovery benefits and living care benefits.  Another interesting option is the Return of Premium rider. If you reach age 75 without a claim, you will be reimbursed for all your premiums (up to $25,000).

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