When should you buy critical illness insurance?


Critical illness insurance protects you financially in the event that you fall ill with a serious or life-threatening illness. You should get critical illness insurance when the financial ramifications of a prolonged illness will have a major impact on your life. It allows you to spend money on medical or non-medical expenses that come up in your recovery. Like life insurance, critical illness insurance gets more expensive as you age.


The old saying goes: When it rains, it pours.

When you are diagnosed with a sudden, critical illness, your first concern should be your health and getting better, of course… but what about money? If you can’t work, how will you pay your bills?

A heart attack, stroke, or cancer can leave you in a bad way in terms of your bodily health, but they can also take a huge hit on your financial health as well. Between taking time off work and losing income, travel costs to get special medical treatments, and the possibility of expensive home care, you could bleed your savings dry.

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Where critical illness insurance comes in handy

Critical Illness Insurance protects you against financial loss that may arise from being diagnosed with a serious illness. Where disability insurance replaces your income on a monthly basis, critical illness insurance provides you with a single, tax-free, lump-sum payment at the time of filing a claim.

Unlike traditional medical insurance, this coverage allows you to spend the money on any medical or non-medical items you may need or want. This lump sum could translate to plane tickets to a special treatment facility, your mortgage payment, specialized equipment not covered by universal or extended health care, a final dream vacation, or maybe even income replacement for your spouse whose workplace won’t provide an extended leave of absence.

Critical illness insurance steps in to cover those extra costs, so you can spend time recovering and resting—not stressing about money.

Why critical illness insurance is important

Critical illnesses are incredibly common. In fact, according to the Canadian Cancer Society, “Nearly 1 in 2 Canadians (45% of men and 43% of women) is expected to develop cancer during their lifetime.”

The Heart and Stroke Foundation reports that “Nine in ten Canadians have at least one risk factor for heart disease and stroke.” Some lifestyle risk factors include smoking, physical inactivity, stress, and unhealthy weight. Other, medical, risk factors include high blood pressure and diabetes.

According to our friends at CanadaLife, “nearly 1 in 3 Canadians will experience a life-altering illness.”

We’re not telling you this to freak you out—but you should be aware that critical illness may have an impact on your physical and financial health.

Often, if you have disability insurance or non-medical coverage, it may have a waiting period of 1-3 months before kicking in. Disability Insurance may only cover up to a certain percentage of your income which can fluctuate over time.

Critical Illness insurance can be your lifeline during these difficult times while the paperwork for your other insurance is being processed. With critical illness insurance, you know how much you’ll get paid out and the process is a lot faster. You can file critical illness insurance right away, with a diagnosis report from your doctor.

Here are a few situations where critical illness insurance can play a crucial role in saving your financial life:

  • Your spouse needs to take time off work and does not have allowances for paid extended leaves of absences; the critical illness insurance can be used to replace all or part of their income (depending on how much coverage you purchase)
  • You are self-employed and do not qualify for disability insurance, critical illness insurance can be used to replace your income.
  • Your medical expenses are not covered by your extended medical or universal health care. This might include adapting your home for any new physical disability you may have or physio appointments.

Critical Illness insurance is especially important if you do not have any other type of medical or disability insurance in place. It covers specific sudden critical illnesses that can include:

  • Heart attack
  • Cancer
  • Kidney failure
  • Alzheimer’s/Dementia
  • Stroke

Not all policies are created with the same definitions of illnesses and coverage. To make sure you’re getting the best coverage for you, speak to one of our advisors today!

Still looking for the best critical illness insurance rates?
PolicyAdvisor saves you time and money when comparing Canada’s top life insurance companies. Check it out!

When should I buy critical illness insurance?

Like life insurance, there are advantages to getting critical illness insurance earlier in life.

Critical illness insurance will get more expensive as you age as you are at a higher risk of sudden illness such as heart attack, stroke, or cancer as you get older. The younger and healthier the lifestyle you have, the cheaper this coverage can be.

If you don’t have it already, NOW is the cheapest time and the right time for you to purchase.

Often, critical illness insurance comes in terms, similar to term life insurance, and can cover you up to the age of 75. Some providers may also provide a return of premium feature to your policy: if you don’t make a claim for a critical illness during the policy term, and want to cancel your policy, the insurance company may pay some of your insurance premiums back to you. Additionally, when you purchase a policy, you lock in your rate for the rest of your term, no matter your age or lifestyle changes.

To determine how much insurance you may need, take a look at your current expenses—your mortgage payments, car payments, potential out-of-pocket medical expenses, travel costs, etc. If you can afford to cover that in the short term, then critical illness insurance may not be worth it for you. However, most Canadians have not saved enough to cover these costs without steady employment—and most critical illnesses will force you to stop work.

Read More: Find out how much critical illness insurance you need using our calculator. 

It is true that when you’re younger you are less likely to be diagnosed with a critical illness, and you may have less financial responsibility than later in life as you earn more in your career and take on more financial risk.

But ask yourself:

  • Even if you have disability insurance or other insurance to replace your income, can you wait that 1-3 months before that insurance kicks in?
  • Have you saved enough to pay for any specialized or out-of-country treatment?
  • Can you pay to retrofit your home if your needs change?
  • If you got diagnosed with a terminal illness and wanted to use your time to take a trip or spend as much time with family as possible, could you afford it?

If you said no, or are unsure, then critical illness insurance may be great protection for you, so you can stop worrying about your bank account balance and focus on your health.

Read More: Do you have gaps in your insurance coverage? Do our online check-up! 

PolicyAdvisor works with over 20 of Canada’s top insurance providers to make sure you get coverage that is best for YOU. If you have questions about critical illness insurance or critical illness riders and want to see if it’s worth it for you, chat with one of your expert advisors.

Need help?
Call us at 1-888-601-9980 or book time with our licensed experts.

  • Critical illness protects you financially from the extra expenses you may not think about or expect when diagnosed with a critical illness
  • When you consider how common critical illnesses are in Canada, the extra coverage can be extremely helpful
  • The earlier you purchase critical illness insurance, the less expensive the premiums will be

By Carly Griffin
Senior Insurance Advisor, LLQP
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