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The Top 11 Critical Illness Insurance FAQs

Posted by Dan Gillis on January 17, 2017
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Do you have questions about critical illness insurance? Here are the top eleven critical illness insurance FAQs.

1. What is critical illness insurance?

Critical illness insurance is a form of health insurance that provides a lump-sum payment should you become seriously ill.

2. What are the types of illnesses covered by critical illness insurance?

Although they can differ from policy to policy, typical illnesses and diseases covered by critical illness insurance may include:
  • aortic surgery
  • aplastic anemia
  • bacterial meningitis
  • benign brain tumour
  • blindness
  • cancer (life threatening)
  • coronary artery bypass surgery
  • deafness
  • dementia including Alzheimer's
  • heart attack
  • heart valve replacement or repair
  • kidney failure
  • loss of limbs
  • loss of speech
  • marjor organ failure
  • major organ transplant
  • motor neuron disease
  • multiple sclerosis
  • occupational HIV invfection
  • paralysis
  • Parkinson's disease
  • severe burns
  • stroke
Coverage can also vary according to the degree of severity of, or conditions associated with, an illness or disease. For example, if you are diagnosed with a type of cancer that is treatable and is not life threatening, you may not be eligible to make a claim.
 
Coverage cannot be purchased for a pre-existing condition or illness.
 
It is important to read your policy carefully. In addition, be sure to ask your insurance professional to provide you with a complete explanation of your coverage.

3. Do I need critical illness insurance?

In determining your need for critical illness insurance, you should consider your personal circumstances and the added financial strain that could be brought about by dealing with a serious illness or disease. Public and private health insurance plans typically do not provide coverage for day-to-day living expenses such as travel to and from treatments, home care and child care.

4. How much does it cost?

Generally, the younger and healthier you are, the lower the premium (cost). However, the cost varies depending on your age, medical condition, your immediate family medical history, the amount of coverage, the number of illnesses covered by the policy, and the insurance company.
 
It pays to shop around to get the best rate. When shopping for a critical illness plan, you should consider your income, financial obligations, dependents, and health care needs. Your professional insurance advisor can assist in finding you the best plan for your needs.

5. How can I make a claim?

You can make a claim if a physician, licensed to practice medicine in Canada and specializing in your particular illness, diagnoses you with a critical illness or disease covered by your policy.

6. If my claim is approved, when will I receive payment?

Generally, a lump-sum, tax-free benefit payment will be made to you 30 days after the claim has been approved.
 
There are no restrictions on how you use the money.
 
Once your claim is paid, your critical illness insurance policy ceases.

7. What if I never make a claim?

If you die for a reason not covered by the critical illness policy, the premiums you paid may be refunded to your named beneficiary. Some plans will return the premium or a portion of the premiums paid during the life of the policy if the policy matures and no claim has been paid.

8. What if I make a full recovery?

You are entitled to collect the entire benefit even if you make a full recovery.

9. Is long-term care insurance the same as critical illness insurance?

No. Long-term care insurance provides for personal care on a long-term basis if you need supervision or assistance with daily living activities due to a chronic illness, disabling condition or cognitive impairment.
 
Long-term care policies generally pay a pre-determined daily benefit amount on a monthly basis. There's usually no restrictions on how the money paid out is used. Some policies only pay for specific expenses incurred for various types of care, such as nursing home or home health care, etc. 

10. Is disability insurance the same as critical illness insurance?

No. Disability insurance, also known as “income replacement” insurance and provides a monthly income replacement benefit if you become disabled and can no longer perform the normal duties of your work. Generally, the benefit is limited to a percentage of your regular income and ceases once you earn an income or you no longer meet the definition of disability in the contract.
 
Unlike critical illness insurance which provides the full policy benefit in a lump sum payment on diagnosis of a critical illness, long-term disability policies may have a waiting period from the onset of disability. Unlike critical illness benefits, long-term disability benefits may be affected by other income you receive or by your full recovery from the illness.

11. Where can I get critical illness insurance?

A professional insurance advisor can help you find critical illness insurance and other types of health insurance coverage.

Related Reading: What to Know When Making a Critical Insurance Claim

Interested in learning more about Critical Illness Insurance and how it can protect you and your family? Download our free ebook: The Beginner's Guide to Critical Illness Insurance.

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Topics: small business owner, critical illness insurance