Critical illness insurance: Essential financial protection in case the unexpected happens

Whether you want to buy a house, take a trip around the world or start a family, your life goals are important to you. The financial repercussions of a loss of income due to a critical illness can be very stressful and affect your ability to meet your financial commitments.

A critical illness diagnosis affects much more than just physical health: it also has emotional, family and financial repercussions. A temporary loss of income and expenses related to medical treatment and recovery can strain your budget and slow your progress toward achieving your goals.

We don’t have much control over whether an illness will happen, but you can be prepared by taking out critical illness insurance. This coverage provides concrete financial support that can help you get through this difficult time, maintain your lifestyle and concentrate on getting better.

This type of coverage does not cover medical expenses—it supplements your existing resources by providing a lump sum payment upon diagnosis of a covered critical illness, which you can use for whatever you need. It can be used to cover day-to-day expenses, pay off debts, pay for uncovered care expenses or keep personal projects on track. It can also be used for unexpected expenses such as adaptive equipment, medical transportation or private consultations.

Financial support in difficult times

When a critical illness diagnosis disrupts daily life, the loss of income associated with an extended absence from work can quickly become an issue. Financial commitments such as a mortgage, rent, loans and bills don’t go away! With a lump-sum payment from critical illness insurance, you can maintain your standard of living and avoid having to dip into your savings or go into debt.

This financial assistance can also have a huge positive impact on your mental health—knowing that your financial commitments are taken care of significantly reduces stress.

The benefits of critical illness insurance

The benefit payment you receive is tax-free.

• You don't have to justify how you use the money you receive. You can use it however you see fit!
• You can cover your financial commitments in case of reduced or lost income.
• You can use it to pay for help at home for you and your family (e.g., meal preparation, housekeeping, homework help).
• The lump sum is paid regardless of your employment status (disabled or working). It does not reduce your disability benefits, nor is it affected if you receive them.
• It can help you cover additional illness-related expenses such as medication, adaptive equipment, experimental treatments not covered by the public plan or rehabilitation costs.
• It can give you some financial leeway after recovery to work part-time, or extend your sick leave, for example.

Critical illness insurance is a pillar of financial security in the event of a serious illness. By providing a lump sum to be used however you see fit, it helps to cushion the financial impact of a diagnosis.

Coverage designed to meet different needs

There are two critical illness insurance products to fit your reality and your budget:

• Comprehensive protection that covers 25 critical illnesses
• A more affordable option, covering the 4 most common critical illnesses

In addition, both types of coverage can be purchased for a temporary period (e.g., 10 years, 20 years or until age 75) or for life. Coverage may also vary according to age, medical history or desired level of coverage. For example, your financial security advisor might recommend basic short-term coverage if you have a limited budget, with the option to change it later.

Starting critical illness insurance young = lots of benefits!

Taking out critical illness insurance when you're young and in good health is a very good strategy: premiums are generally lower, there's less risk of exclusion or refusal, and if a health issue arises, coverage has likely already been in force for a long time.

A simplified underwriting process

The process for taking out critical illness insurance is very simple. All you have to do is answer a few questions and you could be accepted very quickly (based on your health, of course). In most cases, you will not have to do any medical exams, blood tests or other diagnostic tests.

Factors that increase the need for critical illness coverage

Several factors—which vary according to each person's personal situation—can make the financial impact of a critical illness even worse.

For example, if you:

• Do not have disability insurance
• Live far from a major centre and have to travel a long way for treatment
• Have dependent children
• Have a high risk of losing your income in the event of a critical illness
• Are self-employed with no access to employer benefits
• Are the sole source of income for your family

Additional benefits for more flexibility

Medical second opinion service

Most critical illness insurance products include a medical second opinion service. With this service, after receiving a diagnosis, you can consult a group of specialists to get a second medical opinion on the diagnosis itself as well as the proposed treatment plan. This benefit is very reassuring and helpful, and it’s usually available immediately after you take out critical illness insurance.

Compassionate care benefit

In certain situations, partial financial assistance may be paid to you even if the diagnosed illness is not life-threatening. This benefit corresponds to a percentage of the total amount of coverage provided for certain illnesses. This flexibility can be reassuring, as the amount paid out can help cover certain unexpected expenses.

Protect your children too

Critical illness insurance is also available for children. When you get coverage for your child, you give yourself the financial flexibility you would need to stay with them during a serious illness (by taking unpaid leave, for example). You can take out insurance for your baby starting when they’re 15 days old.

The amount paid can be used to pay for specialized care, compensate for a parent's loss of income or cover treatment-related expenses. Children’s coverage includes 5 additional childhood illnesses. Also, don’t overlook the fact that taking out insurance for your children at an early age gives them the advantage of guaranteeing their future insurability (i.e., meeting the required conditions for an insurer to agree to insure them).

A flexible product

One of the great advantages of critical illness insurance is how easily it can be combined with other types of coverage to build a well-rounded protection plan. Whether paired with term life insurance, disability insurance, or even group benefits from your employer, critical illness insurance enhances your overall financial security by covering needs that other product may not.

This flexibility allows you to adapt your protection to your lifestyle and long-term goals. For instance, while term life insurance can secure your loved ones in the event of death, critical illness insurance provides immediate financial support when you need it most. Together, they create a solid safety net that protects both your health and your financial stability, helping you move forward with greater peace of mind.

Discover Diagno$tic

To help you make your decision and understand the financial impact of a critical illness, try out Diagno$tic, a tool that helps you determine your level of financial risk in the event of a critical illness diagnosis. Answer just 5 simple questions and you’ll receive a personalized assessment of your situation to help guide your decisions.

For more information on critical illness insurance, or to apply, talk to your financial security advisor. Don’t have an advisor? Cliquez ici to find one near you.