Critical illness insurance can be instrumental to comfortable retirement

While there are many issues to deal with when someone is diagnosed with a critical illness, one that’s often overlooked is the financial burden it can place on family and loved ones.

Despite our progressive healthcare system, we still are faced with increased waiting periods and out of- pocket expenses for medication, medical equipment and treatments that are not covered by the public health system.

Read: Stay-at-home spouses need insurance, too

With this in mind, clients should ask themselves the following three questions:

  1. Do you know anyone who in the last few years has suffered from cancer, heart disease or a life-altering illness?
  2. Did that event have an impact on their lifestyle or finances?
  3. Would a lump sum benefit have helped?

Critical illness insurance (CII), unlike any other living benefit, is not related to earned income and does not pay out a monthly benefit for a specified period. CII is a lump-sum benefit triggered by a life-altering illness (as defined by the insurance carrier).

Read: You need a Plan B

The benefit is paid after a specific waiting period (30 days in most cases). Another important element is that there are no restrictions on the use of the benefit.

Common uses include:

  • Out-of-country treatment
  • Alternative treatments
  • Medications not covered by public health system
  • Vacations
  • Home or vehicle alterations
  • Debt repayment
  • Home care


The most common reaction to CII is, “I don’t need it, I’m healthy!” But statistics tell us we are far more likely to suffer from a critical illness before age 75 than die from one. In fact, in Canada the probability of surviving a critical illness before 65 is twice as great as dying from it.What used to be considered a terminal illness is now often survivable.

Read: Faceoff: How critical is CI insurance?


Covered illnesses may vary by insurance company. However, most contracts cover illnesses such as cancer, heart attack and stroke. Other illnesses and life-altering events covered can include: multiple sclerosis, paralysis, Parkinson’s disease, blindness, as well as many others.

Coverage can be purchased in a number of ways.The most popular choices are renewable term or level premiums to age 75. Renewable CII is an affordable way to provide coverage for a temporary need (e.g. to pay off a mortgage).

Level premiums to age 75 offer more permanent coverage that ensures the payment of equal premiums through the life of the contract. For affluent individuals, the use of permanent insurance could be the best choice, depending on their situation.

An additional feature that can be purchased and included in a plan allows for the return of premiums after a predetermined number of years or at death. While this feature may look expensive, consider that under certain conditions, you could get a full refund on premiums paid.