Critical Illness Insurance – this is one you should consider taking a closer look at. A quick stat that might open your eyes right off the bat is that if you are 40 years old, you have a 1 in 5 (female) and a 1 in 4 chance (male) to get a Critical Illness before you reach the age of 65.
Here are 7 important things to know about Critical Illness Insurance.
1. Disability Insurance and Critical Illness insurance are NOT the same
Disability insurance provides income for a limited time (it could be months or years depending on the policy). Disability covers the loss of limbs, eyes and hearing.
Critical illness, however, refers to a deadly disease, such as cancer, heart attack or stroke. A one-time lump sum payment is provided to help with the costs of treatment, travel or time off work
2. Critical illness does not mean low survival rate
These days, more than 60 per cent of Canadians live longer than five years after being diagnosed with cancer, and more than 90 per cent survive a heart attack.
Recovery time can be long and uncomfortable, but a diagnosis does not automatically mean death.
3. Cancer must meet the definition
Cancer must meet the definition in your policy. There are many different types of cancer, and many different definitions to protect against this risk.
4. There is a waiting period for coverage
To prevent insurance fraud, coverage purchased when an illness has already happened, critical illness insurance policies come with a waiting period.
If you are ill and without insurance, you may qualify for simplified issue insurance, and everyone can qualify for guaranteed issue insurance.
5. Premiums don't have to increase
If you buy a level-premium policy, your premium will not increase.
6. You may not get the full benefit
You may get a partial benefit. For example, if you do not meet all the conditions.
7. Know about the Big 3
Most people opt for the “Big-3,” which covers cancer, heart attack and stroke. Big-3 coverage accounts for more than 70 per cent of possible critical illness cases.
If you have a specific concern about other illnesses due to family history or predisposition, those can be added. The fewer illnesses named, the lower your premium.