September 20, 2022

Critical Illness Insurance: What is it? Do I need it?

Even with excellent medical insurance, a single critical illness can be a tremendous financial burden to you and your family.

Critical illness insurance provides a one-time, lump-sum payment that you can use any way you want if you experience one of the serious conditions as defined by your policy, such as cancer, heart attack, or stroke. Not everyone’s recovery costs are the same. In addition to the possibility of a leave of absence from your employment, a critical illness can sometimes mean that you are left with other costs of recovery. This could include a need for assistive devices, or even travel expenses— items disability insurance may not cover.

In determining your need for critical illness insurance, you should consider benefits that may already be available to you through other insurance policies that you have. For example, an insurance policy through your employer that may provide sufficient coverage should you become seriously ill.

You should also consider your personal circumstances and the added financial strain that could be brought about by dealing with a serious illness or disease. A critical illness can be expensive.  Consider lost income, medication, and other potential treatment costs. It is estimated that 42% of working Canadians could not survive financially for six months on their current level of savings if they became critically ill. With critical illness insurance, you could have the additional funds at a time of need.

At Northfront insurance we highly recommend critical illness coverage on homemakers, as they have the hardest job of all, but unfortunately do not collect an income for all the efforts they provide for the family, leaving them unable to qualify for disability insurance. If a homemaker does become ill, critical illness coverage will allow them to hire help for childcare if required, or to pay for added expenses of being sick that will not be covered otherwise.

Most critical illness plans cover up to 25 conditions, so it is important to work with an agent to ensure you are aware of your options and what the policies cover and entail. Critical illness allows you to focus on recovery without worry of significant financial burden.

FAQ:

How long does it take to receive benefits from critical illness plans?

Usually after 30 days

When you survive most of the defined critical illnesses for more than 30 days, your coverage is paid out.

What would I use the money for?

Anything you want including:

-Paying for small costs like hospital parking

-Getting a private hospital room

-Covering higher-than-expected medication costs

-Hiring a housekeeper or yard maintenance company so you and your family can spend less time doing chores and more time together

-Getting away from it all – go on a trip with your family while you recover

Who should apply?

Anyone:

Parents, grandparents, even children (through their parents or grandparents).

Yes, that is right – you can place a critical illness policy on your children. Imagine if your child becomes ill and you can no longer go to work. There are even a few plans that will cover you if your child is diagnosed with autism. For children’s policies, again, it is particularly important to work with an agent to make sure you are getting the best product for your needs.

For more information or to discuss your family’s needs, please connect with the Northfront Insurance team.

About Northfront Financial

Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and Certified Financial Planner™ (CFP™) designations.

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