Critical Illness Claims - Canadian CI Insurance

Critical Illness Claims can be expensive. Although it was introduced to Canada about 14 years ago to provide the cash needed, relatively few Canadians have purchased critical illness (CI) insurance.
Many Canadians could benefit from owning CI insurance.

The Canadian Breast Cancer Network, a survivors' group, commissioned a 2009 national survey of 446 Canadians with a recent breast cancer diagnosis. The survey found that most respondents experienced a major financial setback.
On average, 44 per cent of respondents depleted their RRSP savings. Critical Illness Claims comity reports Twenty-seven per cent had to borrow to pay for treatment costs since medicare does not cover all cancer drugs, supplies and prosthetics.

Treatment time for breast cancer averaged 38 weeks. However, Employment Insurance is only payable for up to 15 weeks at 55 per cent of salary. That does not cover half of the treatment time. The resulting financial burdens make many breast cancer survivors feel even more hopeless. Many women had to retire from their jobs.

Breast cancer is one type of critical illness that many people can survive due to improvements in medical science. People who have had heart attacks, strokes and kidney failure often live many more years.

LUMP SUM SPENDING
If you are diagnosed with a critical illness, what could you do if you suddenly received $75,000, for example? Would you see a top medical specialist in another province or in the United States? Would you take your family for a once-in-a-lifetime vacation? Would you renovate your home to make it wheelchair accessible?
One way to make a lump sum cash payout possible is to buy a CI insurance policy.


PAYING CI PREMIUMS

Critical Illness Claims allow you may have to choose between making RRSP contributions and paying CI insurance premiums. Could you make RRSP contributions and accumulate enough money in your RRSP to eliminate the need for a CI insurance policy? With a big enough RRSP you could self-insure.
Instead of paying CI premiums, consider first upgrading or topping up your disability insurance coverage. Maybe you could obtain a better DI policy with a shorter waiting period and a longer benefit period.

Critical Illness Claims- What exactly are these types of claims?

Critical Illness Claims or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.

The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.

The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from Critical Illness Claims, however, 28 days and 30 days are the most common survival periods used.

The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

Critical Illness Claims have a specific definition. The definition of a claim for many of the diseases and conditions have become standardised, thus all insurers would use the same claims definition. The standardisation of the claims definitions may serve many purposes including increased clarity of cover for policyholders and greater comparability of policies from different life offices. For example, in the UK the Association of British Insurers (ABI) has issued a Statement of Best Practise which includes a number of standard definitions for common critical illnesses.