What is Critical Illness Insurance?

Nowadays, people survive serious medical issues such as cancer, a heart attack, or a stroke. And while this is good news if a critical
illness happens to you – your recovery may come with costs that you don’t have the money to cover.

This is where critical illness insurance can play a crucial role. In this article, we’ll explain:

  • What critical illness insurance is.

  • What you can use the money from a critical illness insurance payout for.

  • How you can get critical illness insurance.

What is critical illness insurance?

A critical illness policy is designed to help you pay the costs associated with a serious medical issue such as cancer, a stroke or a
heart attack.  With critical illness insurance, your insurance company will issue you a lump-sum payment once the waiting period has passed.

Critical illness insurance can help you pay for costs that aren’t covered by other health plans or disability insurance.

What can I use the money from critical illness insurance for?

With a critical illness lump-sum payment, there are no restrictions on what you can use the money for. You can choose to use the money

  • Pay down debt or cover costs such as travel to and from your treatment.

  • Cover lost income for you if you cannot work. This is especially important if you are self-employed.

  • Pay for a caregiver or lost wages if your spouse takes time off work to be a caregiver.

  • Cover renovations on your house that are necessary due to your illness.

  • Cover medical treatments and medications not covered by a government or private health plan.

Being able to spend your critical illness insurance lump-sum payment freely takes a lot of stress off you and your family.

How do I get critical illness insurance?

We can help you get critical illness insurance.  If you’re interested in critical illness insurance, these are the steps you’ll need to follow:

  1. Think about why you want critical illness insurance and what kind of coverage you need.

  2. Book an appointment to speak to us. Apply for coverage.

  3. We’ll let you know when you’re approved and deliver your policy.

If you do get any of the illnesses listed in your policy, contact us, and we’ll guide you through the steps you need to file a claim. After your claim is approved, we’ll let you know when to expect your lump-sum payment.

Contact us!

It can be scary to think about getting ill, but critical illness insurance can help put your mind at ease that you’ll have the financial
resources you need. Reach out to us today to learn more!

Why You Should Consider Critical Illness Insurance

If I did a straw poll, I’m sure I’d find that the majority of those asked have some form of life insurance. The reasoning behind taking out this cover is usually centered around the desire to provide protection and security to their family and loved ones in the event of their death, which is clearly an admirable objective. But, if I asked the same group of people who of them had critical illness insurance – essentially, a policy that pays out if you become too ill to work – in all likelihood the number would be much smaller.

Why is this? It makes sense on paper that people would want to sustain their level of income in the event that they become disabled or too ill to work, yet some of the most common objections include the price, a preference to save themselves for such an event (often known as being self-insured) or simply a sense of denial that this could ever happen to them.

Critical illness insurance varies from policy to policy but typical conditions that it covers in Canada includes heart attack, stroke and cancer. Unlike other types of insurance that provide income replacement, if you are seriously ill, critical illness insurance provides a lump sum benefit that can be used in any way you choose.

The benefits of critical illness insurance

Whilst taking out any kind of insurance policy comes down to personal choice and one’s own individual circumstances, many independent financial experts recognize the benefits that critical illness insurance can offer. Here are some of them:

  • Whilst saving and self-insuring can seem like an attractive alternative, it simply isn’t an option for many. Even if you are fortunate enough to have the means to save for such an eventuality, you would need to be able to guarantee a solid and consistent return on your investment for it to outweigh the financial benefit of critical illness insurance – some estimates put this at a rate of around 10% return for 20 years.

  • Whilst some employers do offer company disability plans, they typically do not pay out the full amount of your pay cheque on an ongoing basis, which can have the potential to have a serious impact on your personal finances, just when you need such a worry the least. What’s more, one of the major advantages of a critical illness policy is that, if you are able to return to work and therefore begin earning again, you still have the benefit of the lump sum that has been paid out under the policy – offering you an incomparable measure of financial freedom to potentially pay off your mortgage or put your kids through university. Essentially, offering you much more financial freedom.

In short, there are no perfect answers in the area of your personal finances, but if you are looking for an option that has the potential to offer you a real sense of peace of mind to secure the financial future of you and your family, critical illness insurance is certainly an interesting avenue to explore.

The Best Way to Buy Mortgage Insurance

Before buying insurance from your bank to cover your mortgage, understand the difference between self owned mortgage life insurance and bank owned life insurance. The key differences are ownership, premium, coverage, beneficiaries and portability.


  • Self: You own and control the policy.

  • Bank: The bank owns and controls the policy.


  • Self: Your premiums are guaranteed at policy issue and discounts are available based on your health.

  • Bank: Premiums are not guaranteed and there are no discounts available based on your health.


  • Self: The coverage that you apply for remains the same.

  • Bank: The coverage is tied to your mortgage balance therefore it decreases as you pay down your mortgage but the premium stays the same.


  • Self: You choose who your beneficiary is and they can choose how they want to use the insurance benefit.

  • Bank: The bank is beneficiary and only pays off your mortgage.


  • Self: Your policy stays with you regardless of your lender.

  • Bank: Your policy is tied to your lender and if you change, you may need to reapply for insurance.

We’ve created an infographic about the difference between personally owned life insurance vs. bank owned life insurance.

Talk to us, we can help.