We recently developed an insurance and estate plan with a client and although the client had an excellent group insurance plan through their employer, they were disappointed to learn that they did not have any Critical Illness (CI) coverage included in the package. While more Canadians will suffer a non-fatal critical illness before age 75 than will die by that age, Canadians are less insured for this risk than many of our European peers. We’d like to take this opportunity to review CI insurance and hopefully motivate you to call for an analysis of your specific needs.
Critical Illness insurance was developed in the 1980’s and is designed to pay out a lump sum within 30 days of a policy holder being diagnosed with a disease such as cancer, heart attack, blindness, kidney failure, etc. The policies grew in popularity for two major reasons. First, the probability of suffering a critical illness is very high and secondly patients are very likely to survive beyond the illness (see stats below). Many diseases that would have been certain killers as recently as 30 years ago are now being treated. Policyholders have a greater need for funds to support themselves through recovery and rehabilitation.
40% of Canadian women and 45% of men will develop cancer during their lifetimes
62% of people are expected to survive for 5 years after their cancer diagnosis compared to the general population of the same age and sex
There are over 50,000 strokes in Canada each year
Of every 100 people who have a stroke 15% die
86% of hospitalized heart attack patients survive(Data from Canadian Cancer Society and Heart & Stroke Foundation)
Interestingly CI insurance is the most popular in Europe, Australia and Canada; countries with government run health care programs. There are far fewer policies in the US. Policy holders are perhaps satisfied that their medical costs will be covered by state run programs but feel they would require additional funds to cover lost income, lost income of loved-ones acting as care givers, relocation costs etc. We’d love to hear your thoughts on why our American neighbours don’t insure against critical illness as much as Canadians and also why Canadians don’t hold as much Critical Illness insurance as Europeans on average. And of course, for an analysis of your insurance portfolio, please contact us to set up a session.
Is Critical Illness insurance necessary?
Critical Illness insurance was developed in the 1980’s and is designed to pay out a lump sum within 30 days of a policy holder being diagnosed with a disease such as cancer, heart attack, blindness, kidney failure, etc. The policies grew in popularity for two major reasons. First, the probability of suffering a critical illness is very high and secondly patients are very likely to survive beyond the illness (see stats below). Many diseases that would have been certain killers as recently as 30 years ago are now being treated. Policyholders have a greater need for funds to support themselves through recovery and rehabilitation.
Interestingly CI insurance is the most popular in Europe, Australia and Canada; countries with government run health care programs. There are far fewer policies in the US. Policy holders are perhaps satisfied that their medical costs will be covered by state run programs but feel they would require additional funds to cover lost income, lost income of loved-ones acting as care givers, relocation costs etc. We’d love to hear your thoughts on why our American neighbours don’t insure against critical illness as much as Canadians and also why Canadians don’t hold as much Critical Illness insurance as Europeans on average. And of course, for an analysis of your insurance portfolio, please contact us to set up a session.