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Critical illness insurance

Scenario

A man in his fifties has just found out that he has cancer. He lives outside Montréal and needs to travel to the city to receive the appropriate treatment. He has a life insurance, but since he is still alive, he is not entitled to the insured amount. Due to his illness, he is required to spend large amounts of money on accommodation in Montréal between treatments and he is no longer able to work. Critical illness insurance indemnifies insured persons during their lifetime as soon as they receive a diagnosis of an illness covered by the contract. For the purpose of this scenario, this type of insurance would have immediately provided the insured with a lump sum that he could have used to cover his travel and accommodation expenses, as well as other related costs.

Critical illness insurance enables you to obtain the amount insured during your lifetime when you receive a diagnosis of an illness covered by the contract. You will obtain the full compensation amount since you have a qualifying illness. You do not have to die from the illness to be eligible for compensation. In fact, this insurance is not and does not replace life insurance. Rather, it pays out a lump sum when you are diagnosed with an illness covered by the contract. For example, if you have purchased such insurance and you receive a diagnosis covered by the contract, you may receive the relevant compensation.

Life insurance enables you to leave an inheritance, pay your funeral expenses, repay your debts, help your family maintain the lifestyle they are accustomed to upon your death, and so on. Critical illness insurance pays out a lump sum during your lifetime, enabling you to pay for expensive treatments and accelerate your retirement age in the event of a qualifying illness, etc. Often, you need to survive 30 days following a diagnosis of a covered illness to obtain the insured amount. This amount can be used as you see fit; for example, you may seek healthcare abroad, pay for home care services or accelerate your retirement.

Points to consider before purchasing this type of insurance :

 

+Premium options
+Premium reimbursement option
+Definition of qualifying and non-qualifying risks

  

Reminder

Unlike life insurance, critical illness insurance does not pay out a lump sum upon your death; however, an insurance amount for a critical illness is paid should you survive a certain period of time, such as 30 days from the time of diagnosis.

The main differences between a life insurance and a critical illness insurance
 

Life insurance

Critical illness insurance

When
is the compensation paid?

Upon the death of the insured

When the insured receives a diagnosis of a critical illness or soon after

To whom
is the compensation paid?

To the beneficiary indicated in the contract

To the insured