Skip to main content

Critical Illness Insurance made Simple:


For the past 10 years in Canada, we have all heard about Critical Illness Insurance; yet the average person does not understand how Critical Illness Insurance works.

We know that life insurance pays if you die, and that disability insurance pays if you become disabled; but what about the in between stage where you are diagnosed, but you aren’t sick enough to be disabled and you don’t die either?

The financial cost of being sick is staggering. Drug coverage by group plans and by the government is limited, and living in Canada has now become known as winning the postal code lottery.

We all know someone (maybe even in your own family) that has had a heart attack, stroke or cancer.  Having a critical illness can change your life forever. Finances may never recover, and having a critical illness is often the root of marital breakdown. 

Even for young adults, a sickness may ruin your finances, and moving home with your parents when you are sick is often not in the cards.  So what can you do?

Critical illness is a policy that pays a lump sum of cash, tax free; following the diagnosis of a covered condition and a waiting period.

Full benefits are paid (the list will vary by company) for: 
  • Heart Attack
  • Life Threatening Cancer
  • Stroke
  • Alzheimer’s
  • Aortic Surgery
  • Aplastic Anemia
  • Bacterial Meningitis
  • Benign Brain Tumor
  • Blindness
  • Coma
  • Coronary Artery Bypass Surgery
  • Deafness
  • Heart Valve Replacement
  • Kidney Failure
  • Loss of Limbs
  • Loss of Speech
  • Major Organ Failure on Waiting List
  • Major Organ Transplant
  • Motor Neuron Disease
  • MS
  • Occupational HIV Infection
  • Paralysis
  • Parkinson’s Disease 
  • Severe Burns.

Smaller benefits are paid for malignant Melanoma, Ductal Carcinoma in situ of the breast, early Prostate Cancer type T1A, and Coronary Angioplasty.

Many features are available from policy to policy, none more exciting than the “Return of Premium”. In various forms, this feature will pay 100% of your premiums back to you, if you don’t have a claim in as few as 15 years.

Therefore, your pure cost of the policy is the after tax interest you might have earned if you had invested your money rather than paying premiums.

A Critical Illness policy can be personally designed; and when designing your own policy, understand that every person has different needs, and everyone is at a different stage of life. If you want coverage for the short term, you can buy a term policy. If you want a policy to age 100, you can have that too.  If you only want to cover yourself for the top three critical illnesses - heart attack, stroke and cancer, you can self-limit the policy as well.  Due to the fact that the policies can be specifically tailored to your needs, you can pretty much pick your own premium.

One down side is that you policy premium can be affected by the health history of your parents and siblings. This should concern you, and with good reason. Genetics are good if one hopes for their children to have blond hair and blue eyes; however, you may also inherit the prevalence for unwanted disease.

Canada is a leading country with various Critical Illness products and Canada still offers some Critical Illness products no longer offered in other countries like England and Australia.  Therefore, it would be recommended to purchase Critical Illness coverage sooner rather than later.  

If you are in Nova Scotia, and wish to receive some advice on Critical Illness Insurance, please contact:
Corry Collins CLU CHFC CFS.
902-444-7000

corry@maritimewealth.com

Comments

Post a Comment

Popular posts from this blog

Attend MDRT as an Aspirant or Manager

The Million Dollar Round Table (MDRT) holds its annual meeting this June in Orlando. Members from around the world will be in attendance. The annual meeting is the flagship event for the MDRT. Top advisors from over 70 countries meet and share world class ideas on how to grow your business and how to develop a thriving practice. The main platform is always full of motivation, business ideas and stories that may change your life. Ten thousand people are expected this year. The focus sessions are detailed sessions drilling down on the specifics of specialized subjects. Members and non-members are invited to speak on their area of speciality. Networking with leading industry people (who become friends) is one of the highlights. The mentoring program at MDRT provides a chance for non-members to attend as a guest.  The rules can be found at https://www.mdrt.org/membership/mentoring/ , but here are some of the particulars: The MDRT Annual Meeting scheduled for June 4-7, 20...
Post a Comment
Read more

How Long Will 1 Million Dollars Last?

Once upon a time, a million dollars was a large sum of money. If you had it, you were a millionaire, and everyone was jealous. Today the question is often asked: “if you won a million dollars, would you quit work?” Well the answer depends on several factors like your age, your need for money, and even your health. To answer the question how long would one million dollars last, let’s look at it this way: How long will $1,000,000 produce an income for you before it runs out? Let’s say you needed to take $60,000 as an annual income to spend. Let’s also say that you wanted to increase that $60,000 by 2% per year just to keep up to inflation. To run the numbers, we would assume you wanted to invest your $1,000,000 in a relatively secure place. The rate of interest would be around 1.5% if you wanted a guaranteed return, or maybe a 5% return if you wanted to assume some risk. For argument sake, let’s give you 3.5% over time, and income tax at about 25%. With the above parameters, you...
Post a Comment
Read more

Created by: Corry Collins - Top 10 Fall Financial Checklist - Save Time, Money and Tax.

Summer is not officially over until September 21 st . However, “back to school” week is a sure sign of the fall! The fall is a busy time in our financial planning office, as people seem to use this time of year to tidy up many small items concerning everything financial. It might also be a good time of year for you to do the same, especially if you aren’t in this “fall time” habit. Many people have a list of items to refer to when it comes time for financial clean up. Here is a typical list:       Update beneficiaries on your insurance policies’ if required.       Increase your disability coverage if your income has increased.       Review your RRSP investments against your current Risk Tolerance questionnaire.       Top up your Tax Free Savings Account       Increase your RRSP deposits by 10%       Question your bank to see if you can save money by renewing your mortgage ea...
Post a Comment
Read more