Crash Course in Critical Illness Insurance

We often have clients ask us about critical illness insurance and we give them the facts – navigating through the sales tricks of some companies, and finding the best “real” value.  It’s not all about “what you spend” for critical illness insurance, it’s about “what am I getting for my money?”

Simply put, critical illness insurance is protection for the insured person in the event that they are diagnosed with a covered illness, providing them with a lump sum benefit that can be used for anything.

The list covered illnesses is where the insurance companies begin to differ.  Some companies offer “basic” protection by only covering a few illnesses, namely the “Big 3”; Heart Attack, Life-Threatening Cancer, and Stroke.  Most insurance companies do offer comprehensive coverage with 22 or more covered illnesses…

Covered Illnesses

Cancer Kidney Failure
Heart Attack Loss of Limbs
Stroke Loss of Speech
Coronary Artery Bypass Surgery Major Organ Transplant
Alzheimer’s Disease Major Organ Failure
Aortic Surgery Motor Neuron Disease
Benign Brain Tumour Multiple Sclerosis
Blindness Occupational HIV Infection
Coma Paralysis
Deafness Parkinson’s Disease
Heart Valve Replacement Severe Burns

The insured person must survive 30 days after the diagnosis to be eligible for a claim.

*** Cancer is defined differently by many companies and is the illness that the insured person may have the highest probability of contracting.  Most companies will pay a claim for “life-threatening cancer” but may not pay a complete claim for early detected cancer such as Stage A (T1a of T1b) prostate cancer, ductal carcinoma in situ of the breast, and superficial malignant melanoma.  However, many companies offer an Early Detection Benefit in these cases.  This is where the insured person may get more value out of the policy.

For example; some insurance companies will forward 10% of your actual benefit for early detection situations, while others will go as far as 25%.  Some companies will consider this a “partial claim” and reduce your overall benefit, while other insurance companies will give this Early Detection Benefit in addition to your overall critical illness coverage.

The above is just one example where companies differ and compete to give you value.  There are many other features that a company may offer in addition to the covered illnesses list and the Early Detection Benefit, and care should be taken with a licensed professional to compare what is available to meet your critical illness needs.

Return of Premium

One major feature that most critical insurance providers offer is the Return of Premium.  This feature allows the policy owner to receive all or some of their money back if they never make a claim and wish to cancel the policy.  This feature can be costly and may increase the annual premium by 30% or more.  In most cases the return of premium feature cannot be used in the first 10 years of policy and the benefit may be tiered, meaning that in year 10 you may only be eligible for a 50% return of the premium when the policy is canceled, 60% in year 11, 70% in year 12, and so on.  Each company can be different so make sure that there is absolute certainty on this feature because it may be very costly.

The Bottom Line:

Critical Illness Insurance is great protection for you and your family as a means of replacing lost income, getting treatment abroad, protecting savings, and helping you focus on getting better.  But care must be taken when purchasing the coverage, there are lots of features and benefits in addition to the list of covered conditions that can help eliminate some providers and find the best fit for you.

By Jonathan at and


*This article is for information purposes only and is not intended as specific advice for any individual.  Please review your policy contract for complete details of your existing coverage and speak with a licensed professional (like Jonathan) if you have any questions or concerns.

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