Surviving Critical Illness, But at What Cost?

Surviving Critical Illness, But at What Cost?

There is a significant increase in the chance of being diagnosed with critical illnesses such as cancer, heart attack, or stroke than dying under the age of 75.

There are more than 160,000 new cancer cases, 70,000 heart attacks and 40,000 strokes in Canada every year. It is estimated that approximately 10% of the population will be diagnosed with a critical illness.

Can you afford to be very sick?

According to a study by the CBCN (Canadian Breast Cancer Network) patients with long term cancer face serious financial difficulties, leading to use of all their savings in 44% of patients and rising debt levels in 27% of cases. The study claims that unemployment insurance only covers 15 weeks of the average 38 weeks of treatment.

Most people have contracted a life insurance, yet very few think of contracting critical illness insurance. This type of insurance is an interesting protection against unexpected outcome in life. It is a form of health insurance that provides a lump-sum payment should you become seriously ill.

How does one get insured? Quite easily. It is the insured person that decides on the required amount that will be provided by the insurance company in case of critical illness. Unfortunately, a number of low cost options are offered by some financial institutions, that only cover 3 or 4 illnesses and additionally the premiums are not guaranteed. Most products offered by known insurance companies’ covers up to 24 different critical illnesses, such as cancer, heart attacks, stroke, heart surgery, Parkinson’s disease, Alzheimer, paralysis, loss of vision or speech, and others.

As with life insurance, critical illness is offered as renewable term, whole life, or up to 75 years of age. Premiums are guaranteed in the contract and cannot be modified.

Certain insurance companies will even refund all premiums at the end of the contract if there were no claims after 15 or 20 years, or at the age of 75.

Now, this is what I call a win-win situation. You are insured for a many years and then you get your money back, tax-free.

Other companies offer partial cancellation, where the insured keeps 50% of his insurance at half the cost and gets reimbursed for the other 50% of premium paid.

These products are truly exceptional as they are relatively new in Canada and are still offered at relatively affordable rates.