Are you financially prepared to survive a critical illness?

Have you ever thought about what would happen to you and your family, from a financial perspective, if you were diagnosed with a life-threatening illness?

Almost everyone has at least one friend, associate or family member who has been diagnosed with a serious disease. Dealing with the emotional blow is difficult enough, but compounding the challenges are the financial consequences, such as:

• Loss of wages
• Home-care costs, such as private nursing or child care
• Medical costs not covered under provincial health or employer-sponsored plans
• Out-of-country treatment
• Alterations to home or vehicle
• Reduced capacity to save for long-term goals, such as retirement or a child's post-secondary education.

There is a solution - critical illness insurance

Critical illness insurance pays out when the policyholder is diagnosed with a serious, life-threatening illness, which may include cancer, stroke, heart attack or organ transplant. It's designed to pay the policy amount in a tax-free lump sum, usually 30 days after the initial diagnosis. This is quite different from disability insurance, where it can often take up to three months for long-term disability payments to begin, and the payments are made in monthly installments of approximately 60%-70% of your regular salary. With some illnesses, you may even be back at work before you are eligible to receive disability benefits.

While a disability plan may pay more if you are disabled for a long time, in the first few months there will probably be a shortfall. For many people stricken with a critical illness, the initial period following diagnosis can often be the most traumatic, and the most expensive.

Critical illness insurance provides a benefit in cash directly to you, without any restrictions on how the money is spent. The payment can be used for any purpose, from immediate health-related costs to more general financial concerns such as looking after a business, assets, or family allowing you to concentrate more closely on the most important matter at hand: getting healthy.

Employer and government health programs are there to help, but are you aware of their limitations? Most employer plans define a maximum amount of coverage. If you are critically ill and require immediate and continual treatment, your health insurance coverage might not arrive in time or last long enough.

Although the chances of survival are increasing, coping with a critical illness will not be cheap. The technology and drug solutions that may save your life could destroy your financial well-being in the process. Recovery is often lengthy and expensive, severely eroding cash flow while escalating costs for health care and treatment. Critical illness insurance is the bridge for this gap.

Find the one for you

Critical illness policies vary from company to company, so finding the one that suits your needs is important. Each policy will define eligible medical conditions and the provision of benefits. It's important to pay close attention to the fine print, especially the exclusions. If you end up falling victim to a critical illness not specified in your plan, you would not be able to collect on the policy.

Policies are available to Canadian residents between the age of 18 and 65, although some policies can be renewed until the age of 75 and even for life. Premiums are determined by your gender, age and whether you smoke.

To protect yourself and your family, you would be well advised to consider whether you have a need for critical illness insurance coverage in your financial plan.

If you would like more information on the options available to you through a critical illness policy, please do not hesitate to contact our office.