Critical Illness Insurance is protection for your lifestyle.  It is designed to alleviate the financial burden that suffering a critical illness can create. 

What is Critical Illness Insurance? 

Critical Illness Insurance provides financial protection if you are diagnosed with a serious illness, such as a heart attack, stroke, or cancer. Critical Illness coverage pays regardless of your ability to return to work and the payment is independent of your disability insurance. Critical Illness Insurance pays a tax-free lump sum benefit of up to $3,000,000 if you are diagnosed with, and survive, a covered condition.

People buy Critical Illness Insurance for different reasons. Some buy it to protect their assets, others to provide financial peace of mind at a time of extreme stress and uncertainty, others to have living benefits insurance long after age 65 when their disability insurance becomes restrictive.

Each of my clients that have purchased Critical Illness Insurance agrees that the financial implications associated with surviving a critical illness is a risk they are not willing to take. Critical Illness coverage can be structured to include the Return of Premium (ROP) rider which refunds up to 100% of the total premiums paid if you do not make a claim.  ROP is available after 15 years; or at policy surrender and/or expiry.

Recently, I had a client in my office and I am sharing his story (his name has been changed to protect his privacy) with his permission.  His story offers 4 important reasons why you should consider adding Critical Illness Insurance to your insurance portfolio.

Reason #1: Affluence doesn’t negate the financial impact of suffering a critical illness

Meet Dr. Smith

I started working with Dr. Smith, an Ophthalmologist in 2006. At the time, he was 41 years old and happily married with 3 children (aged 7, 9 and 12).  His annual earnings were +/- $850,000. Dr. Smith had no debt, an RSP worth $425,000 and $500,000 in a corporate investment portfolio. Although not fond of insurance, Dr. Smith recognized its importance as part of his overall financial plan and we crafted his insurance portfolio to include $4,000,000 of life insurance, $20,000 per month of disability insurance, and $500,000 of critical illness insurance. And…. in 2018, at age 53, Dr. Smith was diagnosed with cancer.

Reason #2: A Critical Illness can affect anyone, even healthy people

Dr. Smith tried to understand how this could happen to him. He saw his family doctor annually, was in excellent shape, never smoked and there was no significant family health history. Dr. Smith never thought a critical illness would happen to him.

A few months into his treatment, I visited Dr. & Mrs. Smith at their home to deliver his tax-free lump sum critical illness payment of $500,000 along with the first of his monthly disability insurance payments for $20,000.

Reason #3: The cost of surviving a critical illness is more substantial than most realize 

Dr. Smith’s wife walked me through his recovery plan. I distinctly remember her saying “we will do whatever it takes”. They hired around-the-clock care (registered nurse at $75/hour & a non-medical caregiver at $40/hour) and had modifications made to the house to make it easier for Dr. Smith to get around. Dr. Smith’s disability insurance replaced a portion of his income, enough to cover ‘regular’ household expenses. Additional unexpected lifestyle expenses relating to his cancer treatment were also incurred for items such as; medications not covered by OHIP, home care expenses, travel expenses (Dr. Smith could not drive) as well as higher living expenses as Dr. Smith’s children visited home more often from university to be with their father.

Dr. Smith used his $500,000 tax free critical illness benefit to supplement the $20,000 per month he received from his disability insurance. Had Dr. Smith had a mortgage or not been well-connected within the medical community, he could have used the money to pay down debt or obtain medical treatment outside Canada. The truth is, Dr. and Mrs. Smith are like most people; when faced with a life-threatening illness they were willing to spend whatever it took to get the best care possible, regardless of the cost.

Reason #4: Critical Illness Insurance allows families to focus on recovery

At a time of extreme stress and uncertainty, Critical Illness Insurance provided financial stability for Dr. Smith and his family. The critical illness benefit of $500,000 allowed Dr. Smith to focus on his treatment & recovery, without the additional stress of worrying about his finances. The thought of having to sell some of his investments to pay for his recovery and the devastating effect this would have on his retirement was a burden Dr. Smith did not have to deal with.

What happened to Dr. Smith could happen to anyone. You need Critical Illness Insurance not because you are going to die, but because you are going to live! For this reason, Critical Illness Insurance is part of the planning discussion I have with all my clients.

Do you have the right protection in place to protect you and your family from the financial impact that suffering a critical illness can create?

Let’s figure it out. Book an appointment to discuss your needs and obtain your Critical Illness Insurance quote.