What Does Critical Illness Insurance Cover in Canada?
Being diagnosed with a critical illness is heartbreaking. Dealing with a serious health condition is hard enough, but the mental strain can be made worse by the financial impact. Thankfully, that’s where critical illness insurance can step in.
This will provide you with a lump-sum payment if diagnosed with a certain condition, but what exactly does critical illness insurance cover in Canada? Here we’ll explain all while also giving you other crucial bits of information.
What is Critical Illness Insurance?
Critical illness insurance will protect you from the financial impact of a serious health condition. Once diagnosed, you will receive a tax-free lump sum payout. This is a one-time benefit and can be used for anything the policyholder needs.
It has an important role as life insurance will only pay out after death, and disability insurance is there to cover your monthly income. Critical illness insurance can be used to either see your family through financially rough times while you are unwell, or plan for their financial future without you should the condition be terminal.
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What Does Critical Illness Insurance Cover in Canada?
It’s important to note that critical illness insurance policies can differ in exactly what they offer. While there are common conditions included in most plans, the list below shouldn’t be seen as a definitive guide to what every policy includes.
Instead, here we will list the most common conditions that are included in almost every policy. If you have any doubts, it’s important to double-check with the insurance company before signing up. Let’s take a look at the critical illness insurance cover you can typically expect.
Cancer – This is one of the most common illnesses covered and accounts for a huge portion of claims. However, some policies may exclude non-life-threatening cancers.
Heart Attack – This is another core illness in most policies
Stroke – If there is permanent neurological damage
Coronary Artery Bypass Surgery – Due to the significant recovery time
Kidney Failure – If you require dialysis or a transplant
Major Organ Transplant – The organs covered will be detailed in the policy
Multiple Sclerosis (MS) – Once it reaches a certain stage
Paralysis – If the paralysis is long-term or permanent
Degenerative Diseases – Conditions such as Parkinson’s or dementia will be covered once they reach a specific stage.
Other Conditions Often Covered
The conditions above are the most common to be covered. Below are conditions that may also be included:
- Blindness
- Deafness
- Severe burns
- Coma
- Aortic surgery
- Loss of Limbs (typically multiple limbs)
- Aortic Surgery
- Loss of Speech
- Motor Neuron Disease
- HIV/AIDS through blood transfusion/job-related duties
Exclusions To Critical Illness Insurance Coverage
Even if a condition is listed as covered in the insurance policy, that doesn’t mean the payout will be guaranteed. There are some exceptions which can affect the coverage:
Pre-Existing Conditions
If you have a pre-existing condition, such as cancer, then it’s extremely unlikely to be covered in the policy. You can sometimes get this included for a higher payment but most of the time, it will be excluded from the policy.
Early Stage or Non-Life-Threatening Illnesses
As we touched on with the list above, some illnesses require you to reach a certain threshold before payout. This is especially true for degenerative diseases. Others such as a heart attack or stroke may not pay out unless there is permanent damage.
Self-Inflicted Injuries
An injury or illness caused by intentional harm or substance abuse is likely to be excluded. An example would be liver failure caused by an alcohol addiction.
Illnesses Related to Criminal Activity
If the illness is the result of criminal activity, then it’s unlikely to be covered. An example would be paralysis caused by a crime gone wrong.
Waiting Periods
Most policies will include a waiting period. This is the time stated between the diagnosis and payout. This is usually for the insurance company to do their due diligence and check the claim.
Survival Period
There will also be a survival period. This usually runs alongside the waiting period but most policies will require the policyholder to survive for at least 30 days following the diagnosis.
How Can the Payout Be Used?
One of the advantages of critical illness insurance is that the lump-sum payout is flexible and can be used however the policyholder sees fit. While Canada’s healthcare system will cover many needs, some people will use the money for specialist treatments, drugs or therapies.
With a long-term debilitating condition, the lump sum can be used for home modifications or even home care. It can also be used as an income replacement, which can cover your day-to-day expenses while you focus on your health.
Another common use is debt repayment. Clearing the likes of mortgages can eliminate financial stress and set your family up for the future. These are just some options, as policyholders are free to use the money as they wish.
Final Thoughts
When it comes to what does critical illness insurance cover in Canada? The answer is what most people expect. It covers the most well-known conditions that can leave you critically ill and unable to work.
That being said, it’s still important to double-check your policy and ensure it covers everything you want it to. If you’re looking for a quote or have any further questions, contact Ron Johnston Insurance today and we’ll be happy to find the right critical illness insurance for your needs.