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Critical Illness Insurance - Resources

What is critical illness insurance & why it is important?

Critical Illness Insurance provides financial security to you and your family when diagnosed with a covered condition. Being diagnosed with a critical illness like cancer can severely hamper your financial stability as you take the necessary steps to manage and recover from the disease. A critical illness insurance plan can help keep you and your family’s financial futures secure as you focus on your recovery by covering daily expenses, paying for treatments, covering the cost of transportation and home modifications and more.

What does critical illness insurance cover?

Critical Illness plans cover a wide range of debilitating illnesses. While not every insurer’s plan covers the same number of conditions, most do provide financial coverage for the most common illnesses and conditions like cancer, heart attack, and stroke. For example, at Specialty Life Insurance, we provide full coverage for over 20 different conditions, providing Canadians like yourself with reliable coverage for various illnesses.

What factors will affect my rate?

The most typical factors that will affect your rate are amount of coverage, your age, sex at birth, and smoking status. Certain insurers may also require you to undergo a medical exam to be eligible for the plan; this exam will also affect your rates. However, Specialty Life Insurance’s Critical Illness Plan does not require a medical exam when you apply. This aspect of our coverage makes it ideal if you’ve been denied in the past, have a family history of a disease, or have pre-existing conditions that would typically cause a denial under traditional plans.

When does critical illness insurance payout?

Critical Illness Insurance pays out after submitting a claim when diagnosed with a covered condition. Typically, when you submit a claim for this type of coverage, a 30-day survival period must follow a diagnosis. This aspect of the plan means that you need to survive for 30 days after being diagnosed with a covered condition for the claim to payout. If death occurs during this period, a claim will not payout.

Critical Illness Insurance & taxes

The critical illness insurance plan’s benefit is paid out tax-free after a claim is made following the 30-day survival period.

When can a critical illness insurance claim be denied?

Claims for critical illness insurance are typically denied if you pass away during the 30-day survival period or if your illness results from self-inflicted harm, criminal offences, or the misuse of medication or alcohol. There is also a “2-year waiting period” for claims that are a result of a pre-existing condition. If you develop an illness that results from your pre-existing condition, there will be no benefit payout. But once this 2-year period is over, this exclusion will no longer apply.

If you have a pre-existing condition that is one of the plan’s covered illnesses, it will not be covered. Finally, there is a 90-day cancer exclusion period that will not pay out benefits for cancer, early-stage prostate cancer treatment of DCIS for a period of 90 days from the effective date of the policy or the date of its reinstatement.

When can a life insurance claim be denied?

When your loved ones make a claim after you pass away, the insurance company may not always pay out the plan. The insurer can deny it in certain instances. Some plans have what’s called a “2-year waiting period,” which refers to the period where the policy will not pay out if you pass away. Instead, a refund of premiums is paid back to the beneficiary if you pass away within the first two years. Suicide and material omission (when you willingly misrepresent some information about yourself when applying for coverage) are the other two common instances when a claim can be denied.

Critical Illness Insurance & COVID-19

Critical Illness Insurance plans do provide coverage if COVID-19 causes your condition or you are diagnosed with COVID-19.

Can I get critical illness insurance with a pre-existing condition?

You can still qualify for critical illness coverage if you have a pre-existing condition, but you will not be covered for it under your plan. Also, it is important to note that there is a 2-year waiting period where the insurer will not pay out benefits if your illness results from your pre-existing condition. For example, if you suffer a heart attack and your pre-existing hypertension condition caused it, your benefit will not payout. Once this 2-year period is over, this exclusion will no longer apply.

Is a medical exam necessary to apply?

Some insurers may require a medical exam to apply for critical illness insurance. At Specialty Life Insurance, we do not require you to undergo a medical exam when you apply for coverage.