Is critical illness insurance worth it?

Critical illness coverage is best suited to pay you a lump sum in case of a serious condition covered (25+ conditions covered), big ones such as cancer, heart attack, or stroke.

It is not to substitute health insurance and government healthcare. As an additional financial support, it provides you with the pot of money that you could spend in any way you need: to pay the bills, to cover the treatment, to make your place more comfortable, or to take some time off to recover.

Common features include:

• A list of conditions covered in the policy.
• Lump-sum payout in case of meeting the definition of a covered illness in the policy.
• Use of funds in a flexible manner, and there is no need to present receipts.
• Waiting times and survival times (such as 30-day survival since diagnosis).
  

Critical illness insurance Canada is a financial shock absorber in many households in the midst of a stressful period in life.

Some critical illness plans offer a return of premium option, which means that if you do not make a claim during the policy term, you can receive up to 100% of the premiums you paid back, according to the policy conditions.

This feature allows you to:

• Keep protection in place during the entire term of your coverage.
• Get your paid premiums back at the end of the term if no covered critical illness occurs.
• Feel more comfortable knowing your money is not simply lost if you stay healthy.

Not every critical illness insurance Canada policy includes a return of premium option, and adding it may increase the cost. However, for many people, this feature makes the coverage more appealing because it combines protection with the potential to recover their premiums in the future.

Most policies include the above-mentioned major 25 critical conditions, though they may differ according to the provider. They are as follows but not limited to:

• Cancer
• Heart attack
• Stroke
• Coronary bypass surgery
• Major organ transplant
• Kidney failure
• Multiple sclerosis or significant neurological ailments.
  

Other plans have superior plans that cover early-stage illnesses or other conditions. Others pay attention to a fundamental list of severe incidents.

It is just a matter of reading the definitions. The policy does not pay out simply because you are sick, but when a diagnosis confirms certain requirements.

So, is it worth it? This question will be answered according to your life circumstances. The following are instances in which it can be beneficial:

1. Your Income is Important to the Family

If your family is dependent on your income to pay the mortgage, rent, daycare or daily expenses, then a serious illness may ruin it. A critical illness insurance payout as a lump sum can supplement the gap between when you are unable to recover after a few months or even years.

2. You are Your Own Boss or a Contractor

Business owners, independent contractors, and freelancers will not always enjoy the benefits of strong groups or paid long-term sick leave. Critical illness coverage in that instance can also serve as your safety net as you go through the treatment and business disruptions.

3. You Do Have Large Financial Contracts

Mortgage installment, auto loans, the education of children, or taking care of relatives, all these do not stop in case you get a bad diagnosis. Being covered could enable you to stay on track in achieving the long-term objectives as you concentrate on making an improvement.

4. You Demand Flexibility outside Health Plans

Despite social medical services by your government and basic group benefit offered by your workplace, there are some additional expenses that can be caused by serious illness:

• Special treatment travel.
• Partially covered medication.
• Help at home or childcare.
• Private care and tests.
  

Critical illness cover is a lump sum amount that pays you, and you are at liberty to invest in the best way to support your recovery.

And there are cases when the price can be even higher than the price advantage:

• You already have a sizable savings or investments that you are at ease making use of as a health emergency fund.
• Your employer also offers a wide range of illness insurance and other health benefits.
• There are no or few financial liabilities and payment requirements.
  

Some individuals still opt to have a small policy as an additional buffer at that time, but it cannot be among the priorities they have compared to other objectives, such as clearing high-interest debt or an emergency fund.

The simple answer is having at least one year of income replacement as you critical illness cover, and the best application is to ask:

• Could you comfortably live on what you have saved so far in case you were not able to work?
• What needs to be paid every month, regardless?
• Do you wish money to use on additional treatment, travel or home assistance?
  

There are those who take cover that approximates one or two years of take-home pay. The rest choose to pay their mortgage or a significant amount of it.

The point: would the critical illness insurance Canada pay out tomorrow, would it be a sufficient amount to help you significantly ease the financial burden as you recover?

Part of a more general risk management plan is critical illness coverage, along with:

• Life insurance – this covers your loved ones in case you die.
• Disability insurance – insures a portion of your earnings in case you are unable to work as a result of a disability or illness.
• Emergency savings – absorb short-term shocks and smaller unexpected costs.
  

The products are a solution to different problems. Critical illness coverage is based on the fact that a serious diagnosis will affect your finances throughout your lifetime, rather than after your death and not only regarding lost income.

This gives many Canadians the benefit of having a disability cover and a small critical illness cover, which will ensure they do not have to worry about losing their income, as well as having to take care of huge costs once.

In order to answer yes or no, consider some of the following questions:

• Where would you get money, in case you were seriously ill for a year or more?
• Comfort in retirement savings or health crisis in investments?
• Do you have dependents who would be directly affected by the financial situation?
• Do you have prior insurance via work?
  

In case you find gaps in your responses, it might be a smart idea to add critical illness insurance Canada to your plan, particularly when you are in good health and have an opportunity to secure cheaper premiums.

Critical illness coverage is not about predicting the worst, simply because you are aware of the fact that life is unpredictable, and you decide to prepare yourself for your conditions. Critical illness insurance Canada has the potential to save the lives of a lot of citizens who have dependents, loans or irregular earnings and who may face a financial nightmare when faced with a medical emergency.

It will depend on your savings, the obligations you have, existing benefits and your risk tolerance whether or not it is worth it to you. The fact is to make a wise selection rather than leave it to chance. Wiseconomy Wealth Solutions is available to advise you on whether critical illness coverage is part of your financial risk safety net, whether you are at the active, accumulation or maturity life stage, whether you have specific goals, or if this is part of the budget.