What is Critical Illness Insurance?

To give you some history, critical illness insurance (CI) is the only type of insurance that was not designed by an insurance company. It was created in South Africa by Dr. Marius Bernard when he saw that patients were no longer dying from major illnesses, they were surviving. While it was great to see the survival rate go up, the families who would have, for the most part, been left with life insurance proceeds to cover costs, were now being left with financial ruin.

What does Critical Illness Insurance cover?

Depending on the company, critical illness insurance covers the following main conditions: Cancer, Stroke, Heart attack

With the option to add on other conditions such as:

• Alzheimer’s disease
• Aortic surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Blindness
• Coma
• Coronary artery- bypass surgery

• Kidney failure
• Loss of independent existence
• Loss of limbs
• Loss of speech
• Major organ transplant
• Major organ failure on waiting list
• Deafness

• Multiple sclerosis
• Occupational HIV infection
• Paralysis
• Parkinson’s disease
• Severe burns
• Motor neuron disease
• Heart valve replacement

This might vary between an adult and child policy, as the child policy usually includes certain childhood illnesses. The great thing is that CI comes with many options and you can customize it to fit your needs and budget.

How does Critical Illness Insurance work?

Basically, Critical Illness Insurance provides you with a lump sum payment, that YOU can then CHOOSE how to use it. To me, this is the most wonderful part about this type of insurance, you get to decide whether you use the money to:

• cover costs associated with treatment
• cover lost wages
• allow your partner or family member to be off work to care for you
• to take a trip with your family
• to be able to deal with your illness and treatment privately (not become a gofundme page)

Once you have been diagnosed with one of the covered conditions, there is a survival period that must be met.  For most conditions it is 31 days from date of diagnosis.

Critical Illness Insurance and Children

The biggest reason that I have critical illness insurance on my daughter is that, if she were to take ill, I want to know that her father and I could be by her side for every second that she was in the IWK. Do you want to have to decide who goes with your child and who stays home to continue to work in order to pay bills? I’m guessing the answer is no, and critical Illness Insurance is a way to avoid having to make that decision.

Having CI on your child, also protects their insurability. Meaning that when the child policy expires, they are able to convert to an adult policy with no medical information required. Critical illness insurance relies heavily on current health as well as the health of parents and siblings when it comes to underwriting (seeing if you qualify and at what additional cost if any). So for example, should you suffer from an illness before your child is old enough to get their own policy, that could affect your child’s ability to get critical illness insurance down the road.

Additional Options

Most companies also have the following options that can be added to your policy:

• ROP – Return of premium. If you do not claim a critical illness you can request a return of premium as long as you have fulfilled the minimum time period specified within the policy.
• ROPD – Return of premium on Death. Your premiums are returned to your estate.
• Term CI – Similar to term life insurance, this critical illness insurance increases in premium cost at the start of each new term. A term is generally 10 years. Term CI expires at age 75 (varies by insurance company).
• Second Event. If there is a second critical illness you receive 50% of the policy benefit over and above the base benefit. Second event is an optional rider.
• Waiver of premium. The premium are waived if you are disabled. Waiver of premium is an optional rider.

For those that prefer a more visual presentation or would like some more information, please be sure to check out www.criticaluncovered.ca and send any questions you have my way.

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