Critical Illness Insurance pays a lump sum benefit to you when you are diagnosed with a covered condition.

Critical illness insurance has gained popularity for 3 reasons:

1. The incidences of cancer, heart attack and stroke are rising but we are more likely to survive the initial diagnosis. The financial implications of being unable to work because of the disease and the recovery period make this insurance important to include in your portfolio.
2. As a business owner, a CI policy can be a way of boosting your Income Replacement as the coverage is not tied to your reported income to CRA. You pick the amount of coverage, it does not have to be justified by your T-4 or salary.
3. A popular rider is the Refund of Premium rider which can pay out on death, surrender of the policy or age 75 when the coverage ends. Many people like the option to have their premiums returned if they have not made a claim. Your policy covers you if you have a covered condition but pays you back if you don’t!

We represent a number of insurers that offer Critical Illness contracts and although they are all similar, some have early detection features, additional conditions, cover a second event and may include a clause for Lack of Independence.  Some insurers also offer a Simplified Issue CI product which does not cover pre-existing conditions BUT which covers the uninsurable!

The tax-free lump sum benefit  can be used for anything the policy owner chooses. Many people use the funds to seek a 2nd opinion out of the country, pay for alternative treatments to aid recovery, eliminate their debt, fund a renovation or take a family holiday.

For business purposes, a Critical Illness policy can be structure with the business as the owner and the beneficiary.  In this way, the business is protected if the owner is diagnosed and can hire a replacement to manage the business and pay the bills while the business owner recovers.  A Return of Premium Rider on a business owned policy can also be a strategy for retirement!