Critical illness insurance

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by Sharyn Hillier, B.A., CHS, Hill Life Financial

When it comes to the word insurance, the first thing people think about is life or auto or property. Very rarely do people think about something called critical illness insurance.

So, what is critical illness insurance? Those two words together do not even appear in Webster’s dictionary. But if you use Google, the definition according to Canada.ca is: “critical illness insurance usually pays a one-time lump-sum payment if you are diagnosed with a life-threatening illness. The lump-sum payment may cover expenses such as daycare, or renovations to make your home more accessible.” You and your family, or you and your business, choose how to use the benefit.

But it’s more than that. Let me explain. First, critical illness insurance was invented by Dr Marius Barnard, who was a South African surgeon. He was part of the team that did the first human to human heart transplant in 1967. He saw the financial disaster that was too often waiting for people who had life threatening illnesses. He thought they deserved to get financial assistance to help through the hard times.

As a result, he invented what he called “dread disease insurance”. Thankfully, the name was changed to critical illness insurance. It covers many illnesses, from as little as three to as many as 32 illnesses in Canada. It varies by insurance carrier.

Yet, why is this insurance not as popular as other insurance plans? Well, many people don’t talk about becoming ill. They think it won’t happen to them. Did you know, according to the Canadian Cancer Society, you have an almost 50% chance of getting cancer in your lifetime? That 9 in 10 Canadians have at least one risk factor for heart disease or stroke? So the odds aren’t always in our favour.

Many people believe that the government will look after them when they get ill. That’s partially true. But where the gap occurs is what the patient or their family needs to pay for. Examples include parking, meals for family or friends, accommodations if treatments are received out of town, or babysitting. The expenses can get even higher if, for example, a partner wishes to take time off to spend with the person affected by the illness. People may not be paid by their employer for taking care of a loved one

Other things that may not be covered by the government include prescriptions for cancer-fighting medications, specifically experimental medications, advanced medical care if you choose to find treatments outside of Canada, or recovery in a long-term care facility.

People also believe that they are covered under a group health care plan. Sadly, many group insurance plans do not include critical illness. And there are waiting periods to claim long term disability of up to 90 days. Also, there are often stories about employers who change their plans to save money, and thus decrease or drop benefits entirely.

Long story short: critical illness insurance is attainable. You don’t have to be in the most perfect health. The insurance industry needs to do a better job at getting the word out. Hopefully this has helped.

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