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Critical illness insurance doesn’t replace an individual’s provincial medical insurance—it simply adds an extra level of financial protection in the event that you are diagnosed with a critical illness.
Since the money is paid directly to you, you’ll be able to spend it on whatever you decide is the biggest need—rent or mortgage payments, out of the country treatment, medical equipment, private nursing, bills, etc.
As a small business owner, Harry Thistlethwaite constantly ran “what if” scenarios through his head. What happens if I come down with a serious illness or major injury? Would my business survive? What would my family do?
Harry decided to purchase a critical illness insurance policy simply as a precaution. “I’ll never need it,” Harry told himself.
Harry wasn’t overly concerned when he discovered a lump in his neck, but his doctor decided to order a biopsy to test for cancer. To Harry’s shock and dismay, the test came back positive for lymphoma.
Because he had critical illness insurance, Harry was awarded a large lump sum to help cover expenses, including those related to keeping his business afloat, while he was going through treatment.
Critical illness insurance doesn’t replace an individual’s provincial medical insurance—it simply adds an extra level of financial protection in the event that you are diagnosed with a critical illness. And since the money is paid directly to you, you’ll be able to spend it on whatever you decide is the biggest need—rent or mortgage payments, out of the country treatment, medical equipment, private nursing, bills, etc.
“We went through all sorts of scenarios,” said Harry. “Should we sell the business? Should we partner up? Does the existing staff have the ability to carry on? These are big pressures, but this insurance takes some of that pressure off.”
It wasn’t always easy, but today Harry is both a cancer survivor and the owner of a thriving business— thanks, in part, to his fortuitous decision to purchase critical illness insurance. “I can’t imagine what it would have been like not to have it.”
To obtain more information on critical illness insurance in Ontario, contact a Scrivens critical illness insurance broker today.
Critical Illness Insurance: Critical illness insurance is a type of insurance policy that provides a lump-sum payment to the policyholder in the event they are diagnosed with a covered critical illness or medical condition. Covered illnesses typically include serious conditions such as cancer, heart attack, stroke, organ transplant, and others listed in the policy. The lump-sum payment can be used to cover medical expenses, treatment costs, mortgage payments, debts, or any other financial needs during the recovery period.
Disability Insurance: Disability insurance, also known as income protection insurance or disability income insurance, is designed to provide income replacement in case the policyholder becomes disabled and unable to work due to illness or injury. This insurance can provide regular payments, usually a percentage of the insured person's pre-disability income, to help cover living expenses during the period they are unable to work.
Difference between Critical Illness and Disability Insurance: The main difference between critical illness insurance and disability insurance lies in the events they cover. Critical illness insurance provides a lump-sum payment upon the diagnosis of a covered critical illness, while disability insurance offers ongoing income replacement if the insured person becomes disabled and unable to work.
How Disability Insurance Works: When an insured individual becomes disabled and is unable to work due to a covered injury or illness, they can file a disability insurance claim. The insurance company will evaluate the claim, and if approved, the policyholder will start receiving regular payments, typically a percentage of their pre-disability income, as specified in the policy.
Importance of Disability Insurance: Disability insurance is important because it protects your ability to earn an income if you are unable to work due to illness or injury. It provides financial security during a challenging time and ensures that you can continue to cover essential living expenses, medical costs, and other financial obligations even when you cannot work.
Tax Deductibility of Disability Insurance Premiums: In Canada, disability insurance premiums are generally not tax-deductible for individual taxpayers. However, the benefits received from a disability insurance policy are usually tax-free if the policyholder paid the premiums using after-tax dollars. It is advisable to consult a tax professional to understand the specific tax implications related to disability insurance premiums.
Where to Get Disability Insurance: Disability insurance can be obtained from insurance companies and licensed insurance brokers in Canada. It's essential to compare policies from different providers and understand the coverage, premiums, and any exclusions or limitations before making a decision.
When Disability Insurance Kicks In: The specific terms regarding when disability insurance benefits kick in (also known as the waiting period or elimination period) depend on the policy. It can range from a few weeks to several months after the policyholder becomes disabled. Typically, the longer the waiting period, the lower the premium for the policy.
Cost of Critical Illness Insurance: The cost of critical illness insurance varies based on several factors, including the policyholder's age, health condition, coverage amount, and the specific illnesses covered by the policy. Generally, critical illness insurance tends to be more expensive than disability insurance due to the lump-sum payout nature of the coverage.
What Critical Illness Insurance Covers: Critical illness insurance typically covers a predetermined list of serious medical conditions, which may include cancer, heart attack, stroke, major organ transplant, paralysis, blindness, and others as specified in the policy. Each policy will have its own specific list of covered illnesses.
Does Critical Illness Insurance Cover Cancer: Yes, critical illness insurance often covers cancer, but it depends on the specific policy and the terms and conditions outlined in the insurance contract. Cancer is typically one of the critical illnesses covered by these policies.
