Critical illness insurance: frequently asked questions
Covered illnesses, the lump sum payment, survival periods, how it differs from disability insurance, and how the money can be used.
Critical illness insurance pays a tax-free lump sum on diagnosis of a covered illness, and you can use it however you need.
Here is which illnesses are covered, how the survival period set out in the contract works, and how this protection differs from disability insurance.
What is critical illness insurance?
Critical illness insurance pays a lump sum when the insured person is diagnosed with a covered illness that meets the definition set out in the contract.
The payment goes directly to the insured person, who can then use the money as needed.
Which illnesses are covered?
Plans generally cover several major illnesses or procedures, such as certain cancers, heart attack or stroke.
The list, the number of illnesses and their definitions vary by contract. A diagnosis therefore does not automatically trigger payment. The illness must precisely meet the conditions set out in the contract.
What is the difference between critical illness insurance and disability insurance?
Critical illness insurance generally pays a single amount when a covered illness is diagnosed and meets the contract definition.
Disability insurance instead pays monthly benefits when you are unable to work because of an illness or injury, according to the definition of disability set out in the contract.
Critical illness insurance. Trigger: diagnosis of a covered illness. Payment: lump sum. Purpose: provide financial flexibility during treatment and recovery.
Disability insurance. Trigger: inability to work. Payment: periodic benefits. Purpose: replace part of the lost income.
The two protections are complementary. Critical illness insurance does not replace disability insurance.
Do I have to be unable to work to receive the payout?
No. Payment generally depends on the diagnosis and the contract conditions, not on your ability to keep working.
You could therefore receive the benefit while continuing to work. Conversely, an illness that prevents you from working might not be eligible if it is not covered or does not meet the contract definition.
Can I use the money however I want?
Yes. The amount is generally paid directly to the insured person and is not limited to reimbursing medical expenses.
You can use it for your regular payments, your mortgage, care, travel or a period of rest.
Is it the same as health insurance?
No.
Health insurance reimburses certain eligible expenses, such as medications, dental care or professional services.
Critical illness insurance instead pays a lump sum when a covered diagnosis meets the contract conditions.
Is there a waiting period?
Some contracts provide for a waiting period for certain illnesses, as well as a survival period after diagnosis.
The timeframes and conditions vary by insurer and contract. They should be checked before choosing coverage.
Can I apply if I already have a health condition?
It depends on your health, your medical history and the insurer’s rules.
The insurer could accept the application as is, request additional information, apply an exclusion, adjust the premium or decline coverage.
Is my group insurance enough?
Your group plan may already include coverage for certain critical illnesses, but the amount can be limited.
It is important to check the insured amount, the illnesses covered and what happens to the coverage if you change jobs or leave your employer.
Individual coverage can supplement your group plan.
How much does critical illness insurance cost?
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