Have you ever known a friend, family member or colleague that had a stroke or heart attack, has been diagnosed with Cancer, Parkinsons, or Alzheimer’s, or had their kidney’s fail? Chances are you will have known somebody in your life that has become critically ill. It’s pretty common these days. I can think of many people that I know who have had at least one of these illnesses.
In the insurance industry critical illness has become the new rave. While sales of this type in insurance are not huge, the Canadian insurance industry sees huge potential for this product in the marketplace. In Canada, critical illness insurance is only about 3.2% of the overall insurance market. Many believe critical illness insurance is on the verge of going mainstream.
What is critical illness insurance?
Life insurance protects you for the risk of dying. Disability insurance helps if you are unable to work due to a disability. Car insurance helps you if you get into an accident. Insurance helps you in times of need and protects against risk of loss.
Critical illness insurance is simply another type of insurance that helps you if you become critically ill. There are many different conditions that might be covered under a critical illness policy but the most common are heart attacks, strokes, and cancer.
When people get sick, their focus needs to be on getting better. Unfortunately, financial hardships can cause people to lose that focus. That’s exactly where critical illness insurance comes into play.
Typically, critical illness insurance provides a lump sum payment when a specific condition exists. The money can then be used for a number of different possibilities like finding solutions anywhere in the world, hiring a caregiver, paying of debts, covering expenses that are not covered under government health care, paying for private nursing homes, or to replace income in case of time off work.
What are the chances of getting critically ill?
The risks are real. According to the Heart and Stroke Foundation, 40,000 to 50,000 people a year suffer a stroke in Canada and 60% of these Canadians are women. Each year 160,000 Canadians have heart attacks and half of those are under the age of 65.
In 2001 there were 134,000 new cases of cancer and there is a 35% to 40% chance of getting cancer in your lifetime.
The road to recovery can be a costly one. Only 10% of stroke victims recover completely and can get back to their regular work and life. Canadians spend a total of 3 million days in hospital because of stroke. That’s a lot of lost income and added expenses.
What should I look for if I want critical illness insurance?
Like any type of insurance, you will only benefit from it if something goes wrong. Insurance is meant to protect against risk. Like any other type of insurance, I would encourage you to shop around for the best product for you.
Most life insurance companies will offer some variation of critical illness insurance. Remember the golden rule, not all products are the same. They will differ in price, what they cover the options you can select, especially in the fine print.
Some of my advice is common to buying any type of insurance:
- Shop prices but cheapest is not always the best. Like everything in life you want to get the best bang for your buck and often you get what you pay for. Make sure you compare the premiums of different products but just because it is the cheapest it doesn’t mean it is the best deal. In the end, it is all about value.
- Make sure you look at the benefits. Take the time to understand what the insurance policy will cover and under what situation will they pay out the benefit. I have noticed a lot of variations out there when looking at different plans and products offered by different companies.
- Choose a reputable company. This product is relatively new in the marketplace and you will have added peace of mind dealing with an insurance company that has a solid foundation.
If you are interested in getting some critical illness insurance, a qualified insurance agent may be able to help you find the right product. Remember some insurance agents are captive and will try to promote only the products offered by the insurance company they work for. In this case, take some time to call a few different companies yourself. Like anything, good research often leads to better decisions. Alternatively, find an insurance broker that deals with many different companies instead of just one.