Critical illness
Critical illness insurance provides a tax-free lump-sum payment if you are diagnosed with a serious medical condition covered by your policy. This coverage offers financial security and peace of mind, helping Canadians focus on recovery without worrying about the cost of illness.
What It Covers
Policies typically cover major health conditions such as:
- Cancer (various types and stages)
- Heart attack and heart disease
- Stroke
- Kidney failure and major organ transplants
- Multiple sclerosis, Parkinson’s, Alzheimer’s
- Paralysis, blindness, and deafness
How It Works
- Diagnosis: You must be diagnosed with a covered condition.
- Survival period: Usually, you must survive 30 days after diagnosis.
- Lump-sum payment: Receive the full benefit amount tax-free.
- Flexible use: Money can be used for any purpose, including medical bills, debt repayment, or lifestyle adjustments.
Benefits of Critical Illness Insurance
- Replace lost income when you cannot work
- Cover medical expenses not included in provincial healthcare
- Pay off mortgages, loans, or credit cards
- Fund home modifications for accessibility
- Access experimental treatments or private care
- Support family members during recovery
Who Should Consider It
- Primary income earners in families
- Self-employed individuals without sick leave benefits
- People with a family history of critical illnesses
- Those with significant financial obligations
- Anyone seeking extra financial security
Why It’s Valuable in Canada
While universal healthcare covers basic medical needs, it does not cover lost income, home care, private rooms, experimental treatments, or transportation costs. A tax-free lump sum provides the financial flexibility needed to focus on recovery and support your family.
Frequently Asked Questions
What is critical illness insurance?
A policy that pays a tax-free lump sum if you are diagnosed with a serious medical condition covered by the plan.
What conditions are covered?
Major illnesses like cancer, heart attack, stroke, kidney failure, major organ transplants, and neurological diseases.
How is the lump sum paid?
After diagnosis and a survival period (usually 30 days), the full benefit amount is paid tax-free.
Who should get critical illness insurance?
Primary earners, self-employed individuals, those with debts, or anyone seeking additional financial security.
What can the money be used for?
Income replacement, medical expenses, home modifications, experimental treatments, debt repayment, or family support.
Why is it important in Canada?
Universal healthcare does not cover lost income, private treatments, or some home care services, making this coverage an important financial safety net.
