Critical Illness Insurance: Why Employees and Firms Need It

Critical Illness Insurance represented with heart beat

You never know when your health may take a turn for the worst. However, having critical illness insurance in place can protect you should the unthinkable happen.  

Critical illness insurance can provide you with a tax-free payment if you ever become diagnosed with a covered illness. This payment can help you cover medical bills and living expenses as you work through your health crisis. 

Read on to learn more about critical illness insurance in Canada, then contact our Advantage Pacific Services team to schedule your consultation. 

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Critical Illness Insurance: The Basics

Critical illness insurance is a living benefit that provides you with a one-time payment if you experience a critical illness covered by your plan. 

Here is how critical illness insurance works:

  1. Choose your coverage amount. 
  2. Pay your premium. 
  3. File a claim after receiving a covered diagnosis. 
  4. Receive your payment. 

Depending on your coverage amount, you can use critical illness benefits as supplemental income during a health crisis or to replace your entire income should you become unable to work. This insurance can provide you and your family protection and peace of mind that you would be able to stay afloat during a critical illness.

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Critical Illness Statistics

Many people believe they will never experience a severe illness, such as cancer, a stroke, or a heart attack. However, these conditions are unfortunately more common than you may think. 

According to data from the Canadian government:

  • About 2.6 million Canadian adults live with diagnosed heart disease.
  • Approximately 14 Canadians die of heart disease every hour.
  • Cancer is the leading cause of death in Canada, accounting for 28.2% of deaths. 
  • Approximately 233 Canadians die of cancer every day.
  • About 878,000 Canadian adults have experienced a stroke.
  • Around a quarter of Canadians who have experienced a stroke are under age 65. 

Altogether, life-altering illnesses affect one in three Canadians in their lifetimes. Many of the most severe health conditions come on suddenly and require expensive treatments and lifestyle changes.

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What Is the Right Amount of Coverage?

Determining the right amount of coverage to purchase in your critical illness insurance is essential. You want to ensure that your coverage is adequate to cover all the expenses involved in your illness. 

For example, you will probably have to pay for medical treatments and equipment. You may also need to miss work while recovering. 

To determine the right coverage amount, you should first consider your current income. Then, add up your current expenses, such as:

  • Mortgage or rent
  • Personal loans
  • Groceries
  • Utilities
  • Other living expenses

Then, consider the additional expenses you may face if you experience a serious illness, such as:

  • Childcare
  • Healthcare
  • In-home health assistance
  • Travel for treatments

Your insurance advisor can examine all these factors and help you determine the right coverage for your needs. However, we typically recommend a minimum coverage of one year’s salary. 

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What Is Return of Premium Rider? 

Riders are optional benefits you can add to your critical illness insurance to expand its coverage and alter its terms. One rider we highly recommend considering is the return of premium rider.  

This benefit would allow you to get your money back if you do not experience a serious illness within a specific period, such as twenty years. Depending on the plan, you may be able to receive a partial or full refund through this rider. 

The critical illness insurance policy you choose will lay out the terms of the return of premium rider. However, if you are hesitant about paying for an insurance plan you do not think you’ll need, this rider can help you feel more confident that you will not waste your money.

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Corporately Owned CI Insurance

If you own a business, you may want to consider critical illness insurance for business owners.

This form of insurance can give your business a tax-free payment if you experience a serious illness. Depending on your coverage, you can also insure your critical employees through this plan.

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Which Term Should You Choose?

When you purchase critical illness insurance, you will need to choose the amount of time that your plan remains active. Most providers offer plans in ten-year increments, but you may also see policies that last until a specific age, such as 65 or 75.  

Usually, the younger you are now, the longer term you should choose. However, we typically recommend that most clients choose a plan that ends when they turn 75 or later. Older individuals tend to have higher frequencies of critical illnesses.

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Get Started Today

Critical illness insurance can provide peace of mind that you will be adequately insured if you ever become diagnosed with a covered critical illness. Contact our Advantage Pacific Services team today at 778-349-8774 to learn more about this insurance coverage and book your consultation.

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