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 Tumour, 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
and 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 your 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 CH.F.C.
902-444-7000
corry@maritimewealth.com
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