CRITICAL ILLNESS INSURANCE By Sandeep Ahuja

 

Modern lifestyle has a tremendous impact on people’s health. Hence, we are seeing more and more of us ending up in hospitals with some hard to cure diseases, resulting in financial difficulties. Statistics (from Heart and Stroke Foundation, Canada) show that heart failure is on the rise. 50,000 Canadians are diagnosed with heart failure each year, and 600,000 are living with it. According to Canadian Cancer Society statistics, nearly 1 in 2 Canadians is expected to suffer from cancer.

Critical Illness Insurance

Critical Illness Insurance is insurance protection that guarantees payment of a tax-free lump sum benefit in case the insured suffers from a critical illness. This benefit may be used to pay for insured’s treatment, pay regular bills and, help his/her loved ones who may have to take time off their work to look after the insured.

Eligibility Criteria

  • The insured must survive for 30 days after the diagnosis of critical illness. This period can increase up to a maximum of 180 days in some instances.
  • Critical illness should be diagnosed by your family physician. Insured’s own declaration does not constitute a valid claim. Based on physician’s certification/statement and supporting medical record, the insurance company pays a lump sum payment depending upon the coverage purchased.

Positive features

  • You can insure yourself for the benefit amount as per your needs/priority/circumstance and are not bound to spend the benefit amount entirely on your medical treatment.
  • In the event of a critical illness, if the disease is considered eligible for payment of benefits, you will receive a full refund of the face value.
  • You can add features, as a Rider to policy, like ‘Return of premium on Death’, ‘Return of Premium on Expiry of Policy’ etc.
  • You are the beneficiary of the Critical Illness Insurance but, you can nominate a beneficiary. However, you must name a beneficiary for ‘Return of premium on death’ rider.

EXAMPLE: A 35-year old non-smoker female purchases critical illness coverage of $100,000 Plan Term-75, with refund of premium on death and refund after 15 years riders. Under the policy, she will pay a monthly premium of $136.80 totalling to $1641.60 annually. In the duration of the plan, if she claims an eligible critical illness, she will receive a cheque for the full face amount of $100,000. Any time after 15 years, she can apply for a full refund of premium paid to date. If unfortunately, she dies, after say, 6 years of purchase of policy for any reason; her family will receive a full refund of the paid premium amount of $9849.60.

Thus, in all situations, the insured/claimant has nothing to lose.

Still, some people avoid it for different reasons. Those on low income feel it as an additional burden. But, at the time of critical need, the absence of insurance coverage would make it even harder to cope with the expenses incurred.

On the other hand, people who are well-off, feel that they have enough money to cover their medical emergency. So, they don’t feel ‘the need’ to buy any insurance. But if they are insured, they would be able to leave their capital untouched for further growth.

As an independent insurance advisor working through Punjab Insurance Agency, I deal with different insurance companies offering plans for critical illness insurance. I can explain to you in detail, various critical illness plan options and coverage that are suitable for your needs and resources. For a no obligation appointment, please call me at 604-996-6862 or email me at sandeepahuja@punjabinsurance.ca