Critical Illness Insurance
January 2005
Critical Illness Insurance helps protect you against one of the greatest financial risks that you face during your working years.
A serious illness can threaten your ability to earn an income. This loss of income may render you unable to maintain your standard of living, save for retirement, or achieve many of your other financial goals and objectives.
A significant loss of earnings is typically a result of a prolonged disability or premature death caused by a critical illness (e.g. cancer, heart disease, stroke, MS). Statistically, 40% to 60% of us will be diagnosed with a life threatening illness before the age of 75; fortunately, advances in medicine and technology have significantly increased the probability that we will survive the diagnosis of such an illness.
However, fighting an illness does not come without its emotional and financial costs. Unforeseen expenses will be incurred, which typically include:
- Basic medical expenses not covered by government or employer-sponsored plans
- Preferred and/or “alternative” medical treatments
- Home renovations and adaptive equipment
- Lost income
These expenses range from a few thousand dollars for short-term prescriptions, to $500,000 for heart surgery in the United States, to over $1,000,000 for years of lost income (or significantly more for higher income earners). What is Critical Illness (CI) Insurance?
Critical Illness Insurance will provide a lump-sum cash benefit ($25,000 - $2,000,000) in the event that you are diagnosed with a qualifying critical illness. Typically, these funds are used to pay upfront medical costs, replace lost income, pay off debt, obtain improved medical treatment either in Canada or abroad, or to simply take an extended leave of absence from work in order to recover.
The cost of CI Insurance varies, as do the specific terms and conditions of each insurer’s CI contract. Several insurance companies offer plans with a number of differing benefits and options. The amount of insurance you apply for, your age, health, and the type of policy optionsd you choose all have an impact on the cost of the insurance.
Some policies will refund all premiums paid, less any benefits received, upon the expiry or cancellation of the contract (usually after 15 years or at age 65 to 75).
Utilizing Critical Illness Insurance to protect you against the devastating financial effects of a serious illness can be an important part of your financial plan.
Your Rogers Group Financial advisor can provide further information and prepare a customized Critical Illness Insurance quotation tailored to your specific needs.