Critical Illness Insurance
Consider what would happen if you are diagnosed with a critical illness. Although you have disability coverage, there are many additional expenses not covered by disability insurance or your health benefits. Your spouse may have to miss work to assist with your care, many of the drugs needed to help with the side effects of other medications may be over the counter and therefore not covered under your health plan, or you may wish to consult a specialist outside of Ontario/Canada. The cost of being diagnosed with a critical illness is high, and critical illness insurance helps cover these extra costs by providing a lump sum tax free benefit if you are diagnosed with one of the many conditions defined in the contract and survive the waiting period, which is typically 30 days for most conditions.
Critical Conditions Include:
- Aortic Surgery
- Aplastic Anemia
- Bacterial Meningitis
- Benign Brain Tumor
- Cancer (life threatening)
- Coronary Artery Bypass Surgery
- Dementia (including Alzheimer’s)
- Heart Attack
- Heart Valve Replacement or Repair
- Kidney Failure
- Loss of Limbs
- Loss of Speech
- Major Organ Failure
- Major Organ Transplant
- Motor Neuron Disease
- Multiple Sclerosis
- Occupational HIV Infection
- Parkinson’s Disease
- Severe Burns
The benefit is payable as a lump sum for virtually all of the critical conditions and it can be used however you wish. Once the full payment is made, the policy terminates.
The policy also includes a long term care component, which pays a monthly benefit equal to 1% of the face amount if you satisfy the definition of dependency.
To apply for coverage, an application with lifestyle, medical and family history questions is required. In addition, blood, urine, height and weight, may be needed depending on your age and amount of coverage applied for.
Critical Illness can be issued many different ways, at many different premium costs. Coverage can be obtained for life, to age 75 or on a 10 year term basis, where premiums increase every 10 years. Lifetime coverage includes the option to limit premium payments to only 15 years, after which time the policy remains in force for life.
Once the policy is issued, the premiums are guaranteed and remain level for the duration of the contract. Term 10 coverage increases every 10 years, however the renewal rates are outlined in the contract at time of issue and are guaranteed.
It is possible to add an optional return of premium benefit in which all premiums, including the cost for the return of premium option, is returned if the policy is cancelled or terminates. There are various return of premium options available such as:
- Return of premium on death: Refunds 100% of premiums paid if you die before receiving the critical illness benefit.
- Return of premium on expiry: Available on coverage to age 75. This refunds 100% of premiums paid when the policy expires at age 75, if the critical illness benefit has not been paid.
- Return of premium on early surrender: Available on coverage to age 75 and lifetime (T100). Refunds 100% of premiums paid if you choose to cancel your policy after it has been in force for 15 years and the critical illness benefit has not been paid.