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What is critical illness insurance? And why do I need it?

July 28, 2022


What is critical illness insurance?

Many individuals in the country suffer heart attacks annually, and a few suffer from a stroke. There are also chances for both men and women to develop some form of cancer in their lifetime. As alarming as that sounds, most Canadians go bankrupt because of failure to fail their medical bills. Critical illness insurance is a type of insurance plan that pays out a lump sum benefit when the policy owner is diagnosed with a severe illness. It is a supplemental insurance plan where the policyholder will receive a one-time cash payment if diagnosed with a condition considered critical in the plan, such as the conditions mentioned above. This policy is also known as critical care insurance and sickness insurance which covers the cost of treating and recovering from these serious conditions that require costly procedures.

Why does one need critical illness insurance?

Most individuals do not require to buy a critical illness plan. If you work, it makes more sense to purchase disability insurance as the plan is more comprehensive, and the benefits last longer. If an individual is diagnosed with a severe illness, the lump sum payout they receive from the policy can be used to pay for their medical bills and take care of their out-of-network doctor costs. Similar to disability insurance, both these plans pay out benefits if one experiences a serious medical issue. However, a critical illness plan costs much lesser than a disability insurance policy. As mentioned above, there are a few reasons why purchasing critical illness insurance is a good investment. And now, you must understand how this policy works and how much it costs. Imagine what a significant payment could do to you financially if you are diagnosed with a serious medical condition such as cancer or a stroke. You will never need to use your critical illness coverage if you're lucky. If that happens, you can get some of the money back if you have a return of premium rider on your plan. It also gives the policyholder a stronger financial safety net to fall back on. Even though a standard health insurance plan or disability insurance policy covers most of your needs financially, having a critical illness plan can help cover what is left over. Unavoidable medical bills can put a strain on your finances and even your health; prevent that by purchasing a critical illness policy.


Suppose you are worried about falling ill and unable to afford the expensive medical bills of a severe medical condition. In that case, a critical illness insurance plan is a fantastic supplemental policy that gives you complete peace of mind. You might want to read through the terms and conditions of the plan carefully, as, at times, it can leave out a few common health conditions. Ask the insurance provider about the limits on the payout. If you have a traditional health insurance policy or disability insurance, reviewing the coverage you currently have is a great idea. For further details on critical illness insurance or need help in choosing the best plan that suits your needs, please do not hesitate to contact us today to schedule an appointment.