Is Critical Illness Right for You?

Is Critical Illness Insurance Right for You?

It is probably the most disturbing news an individual can receive during a routine checkup: you have a critical illness and you must receive treatment for it. 

Thankfully, Canadians have access to healthcare and can receive treatment without spending an arm and a leg out of pocket. But what if the doctor’s orders also require taking a significant leave from work, leading to income loss? Or what if the rare but recommended treatment requires expensive travel to a clinic across the continent or even out of the country?  

According to Bankruptcy Canada, getting a serious illness, along with income reduction and job loss are some of the most common reasons Canadians file for bankruptcy. However, Critical Illness Insurance, or commonly called CI, is designed to provide you with tax-free funds to assist you financially in the event that you are diagnosed with a life-threatening illness. 

As financial advisors will tell you, CI covers a number of these illnesses and conditions. A comprehensive policy can insure an individual against more than 20 of these ailments. Typically, the tax-free benefit is paid 30 days after diagnosis or surviving an event, such as heart attack or stroke. Some examples of life-threatening illnesses include cancer, benign brain tumor, Parkinson’s disease, ALS, or coronary artery bypass surgery. 

But why purchase it now?

As a healthy individual, it is hard to imagine receiving such a life-changing diagnosis; however, it is important to remember that developing a critical illness is very common. For example, according to the Canadian Cancer Society, nearly half of all Canadians will develop cancer over the course of their lives. In 2020 alone, there will be 225,800 new cancer cases and while some of those will not be critical, 83,300 of cancer cases this year will result in death. Other critical illnesses, such as heart disease and stroke, are fairly common occurrences as well. 

While these statistics are concerning, advances in medicine and long-term care have increased the survival rates for individuals diagnosed with a critical illness. And according to Statistics Canada, Canadians’ lifespan has increased from 79 to 82 years in the last 20 years. This means that the likelihood for an individual to survive  – and thrive – after a serious illness has also increased. 

Good news, right? 

The reality is that the majority of Canadians are unprepared financially for a life-altering diagnosis. While some Canadians may think they have saved enough money to protect themselves from financial ruin, this may prove not to be the case depending on the type or severity of the illness they were diagnosed with and the lifestyle changes that might be necessary. 

This is what world-renown South African physician, Marius Barnard, discovered after treating critically ill patients, many of whom eventually recovered only to find their finances in a state of disarray. Barnard, who assisted his brother Christiaan in performing the world’s first successful open heart surgery in 1967, also helped develop the world’s first CI policy in 1983 with South African insurance company, Crusader Life.

Barnard traveled the world promoting CI, famously noting that: “People need insurance not only because they are going to die, but because they are going to live.” He also repeatedly noted that patients with little to no financial stress recovered faster and had better health outcomes. 

CI can keep you and your family afloat while you recover. It also protects your retirement, covers your daily expenses, and can help with any unforeseen expenses, such as hiring a home care nurse or traveling to a specific hospital or clinic for treatment. This means that an individual with CI can recover from such an illness without worrying about the toll the illness has taken on their financial stability or the financial wellbeing of their family. 

Questions? Reach out if you are interested in exploring if critical illness insurance is right for you.  

And as always, please feel free to share this article with anyone you think would find it of interest.

Juvenile Critical Illness with Return of Premium – Protection if you need it. A refund if you don’t.

Critical Illness Insurance – Not Just for Adults

Most of us have experienced or known someone whose family has been greatly impacted by a parent being diagnosed with a life-threatening disease or condition. But what about when it happens to children? Sadly, all too often children are affected by childhood diseases such as:

  • Type 1 diabetes mellitus

  • Congenital heart disease

  • Cerebral palsy

  • Cystic fibrosis

  • Muscular dystrophy

The emotional and financial impact of these types of diagnosis can be devastating for a family.

Why would juvenile critical illness coverage make a difference?

  • Provides funds to find the best treatment and care for your child – inside or outside of Canada.

  • Provides the financial resources to be able to focus on your child’s needs so you don’t have to worry about;

    • Working

    • Extra childcare expenses for other children in the family

    • Extra expenses incurred by the illness.

  • Being prepared for this unexpected event will give you the priceless freedom to spend extra time with your child without the stress of financial concerns.

While most life insurance companies in Canada offer Critical Illness protection for adults, not all offer similar coverage for children. Of those that do, Sun Life provides a particularly unique policy when combined with a Return of Premium Option.

What makes Sun Life’s Juvenile Critical Illness Unique?

  • Insures against 25 adult conditions, plus the above childhood illnesses.

  • At age 24, childhood conditions drop off and the policy automatically continues as an adult plan.

  • The Return of Premium Option provides an automatic refund of 75% of all premiums paid at age 25 or 15 years from the policy date whichever is later.

  • The policy can be surrendered 15 years or later from that date for a refund of the balance of total premiums paid.

What happens when there is no claim?

Bob and Sally purchase $200,000 Critical Illness Term to 75 with Return of Premium Rider on their 5 year old son, Michael. The annual premium for the policy is $1,393 ($462 of this premium represents the Return of Premium Rider)

  • At Michael’s age 25, an automatic refund of premiums returns $20,895. This represents 75% of the total premiums paid to date.

    • Adding the Return of Premium Rider for a cost of $462 a year represents a tax-free rate of return of 7.26% on that portion of the premium.

  • In Michael’s case, he can surrender the policy any time after his age 40 for a full refund of the balance of the total premiums paid.

Additional Premium Refund at surrender:

  • Age 40 $ 27,860

  • Age 45 $ 34,825

  • Age 50 $ 41,790

Sun Life’s Critical Illness Insurance plan with the Return of Premium Option for juveniles is a very unique plan that provides peace of mind if you need the protection and a full refund of your premiums if you don’t.

If you would like to explore this exceptional plan in more detail please call me and I will be happy to assist. Also, feel free to share this article with anyone you feel would benefit from this information by using the share buttons.

* – assumes application is made for non-smoker rates at age 18

Copyright © 2017 FSB Content Marketing Inc – All Rights Reserved