WHAT IS IT?

Critical illness isn’t just another financial product created by insurance companies.  Rather, critical illness insurance was first developed by a medical doctor: Dr. Marius Barnard.  Dr. Barnard observed the financial perils his critically ill patients encountered and understood the need for an insurance-based solution to protect against these circumstances.

Experiencing a critical illness demands a significant physical, emotional, and financial toll.  Critical illness insurance is designed to ameliorate these damages by providing a tax-free payout after diagnoses of 1 of as many as 25 illnesses. This benefit can replace lost income, repay financial obligations, assist one in accessing expensive medical care, fund in-home support, or be used for any other purpose.  Furthermore, many policies include a preventative incentive which allows the policy owner to access up to 15% of the policy’s face amount if they are diagnosed with a qualifying serious, but not critical, illness.

HOW DOES IT WORK?

The first step toward protecting against the repercussions of suffering a critical illness is determining what type of critical illness insurance best fits within one’s unique financial picture.  Most critical illness products fall within one of the following two categories:

TERM CRITICAL ILLNESS INSURANCE

  • With terms ranging from 10 to 25 years, term critical illness insurance is a great solution for those with a temporary need to protect against lost income or cover particular financial obligations.  Term critical illness is markedly affordable and simple to issue. 
  • Term critical illness insurance guarantees rates for the duration of the term.  At the end of the term, the policy owner can decide to either replace the policy with a fresh policy or they can allow the policy to execute its automatic renewal feature.  If one remains in good health, they will often elect to replace the term policy with a new policy as the replacement will be much more affordable than the automatic renewal.  This is due to the replacement policy factoring one’s current health into its pricing while the automatic renewal assumes a worse-case-scenario health situation and prices the renewal premium accordingly.  If one happened to be in poor health as their renewal approached, they may decide to allow the automatic renewal to occur as they would not qualify for new coverage. 

 

PERMANENT CRITICAL ILLNESS INSURANCE

  • Permanent critical illness insurance offers all the same benefits of term insurance but on a permanent basis.  This means no renewals.  Once placed, the premium remains the same and coverage continues to either age 75 or for life.  One notably attractive component of permanent critical illness insurance is the ability to add a return of premium rider.  The return of premium rider allows for the owner to cancel the policy, usually after year 15, and receive every single dollar paid into the policy back in their pocket.  This feature makes permanent critical illness insurance an incredibly attractive solution for a diverse range of portfolios.

To secure the selected critical illness coverage, one must apply for the insurance.  Paradigm Insurance Inc. often utilizes non-face-to-face application methods to maximize efficiency.  This means that an application can be completed and the policy can be issued solely through telephone and email communication.  Alternatively, one can attend our Winnipeg office if he or she prefers to complete the application in person.

Paradigm Insurance Inc. works with a wide array of insurers to guarantee the delivery of the best product, at the most competitive price, in the most client-friendly manner.  Currently, we can offer clients under the age of 50 $199,999 of critical illness insurance without medical underwriting being required upfront.  By use of artificial intelligence, most applications that fall within those parameters will be issued within days of completion.

WHO BENEFITS FROM IT?

If the insured individual is diagnosed with a qualifying critical illness, a tax-free benefit is delivered to the policy owner; be it the insured individual or a corporation.

If the insured individual receives the benefit, they can use the funds however they see fit.  The money may assist in receiving express private healthcare from a facility like the Mayo Clinic, it may cover unavoidable expenses to unburden the family, it may even be used to take a vacation.  There are no restrictions on how the funds can be used.  Consequently, the potential benefits of maintaining critical illness coverage are unlimited.  In short, a critical illness benefit allows the recipient to focus on what matters most to them when times are dire.  The critical illness benefit liberates the recipient from financial distractions and, instead, allows them to focus on recovery.

Alternatively, if a corporation elects to purchase a critical illness policy, it may do so to protect itself from the loss of a key-employee or to abide by the terms of a buy-sell agreement.  The loss of a key-employee may result in lost revenue as a consequence of decreased sales or performance and or this loss may result in unwanted costs associated with locating and training a replacement.  By purchasing critical illness insurance, the corporation will receive a tax-free payment after the insured’s diagnosis and can use these funds as it sees fit.  Furthermore, many corporate shareholder agreements require the shareholders to maintain insurance for the purpose of facilitating a smooth transition in the event of one shareholder either passing away or becoming unable to perform his or her duties.  Critical illness insurance can fulfill this need by providing the remaining shareholders the funds necessary to buy the exiting shareholder’s shares at the necessary time.

WHO CAN APPLY?

Anyone up to the age of 65 can apply for some form of critical illness insurance.  The existence of particular preexisting conditions may restrict, or make it difficult, for some individuals to obtain critical illness coverage.  However, Paradigm Insurance Inc. works with a vast quantity of insurance providers which maximises the probability of discovering a suitable solution.

WHAT ARE THE ODDS OF BEING DIAGNOSED WITH A CRITICAL ILLNESS?

The statistics regarding critical illnesses are stark: 

  • 25% of Canadians will develop some form of heart disease
  • 50% of people will develop cancer
  • 62,000 Canadians suffer a stroke every year. 

As the field of medicine advances, survivability of these events improves. 

  • 60% of Canadians will be alive 5 years after their cancer diagnosis.
  • 85% of those who experience a heart attack survive.
  • 80% of stroke victims live. 

The average age for a critical illness diagnosis is 49 and the average benefit paid is $56,000.  To understand your personal risk, consider using the Canada Life Know your Risk Calculator.  In less than a minute, you can gain an understanding of how likely you are to experience a major health event.

WHAT ILLNESSES ARE COVERED?

Most commonly, the purchaser of a critical illness policy can select one of two coverage options: 25 illnesses or 4 illnesses.  The ’25 illnesses’ option provides the most comprehensive coverage available while the ‘4 illnesses’ option is a more affordable option which covers the 4 most common critical illnesses.

The 25 covered illnesses are often the following:

  • Aortic Surgery
  • Aplastic Anemia
  • Bacterial Meningitis
  • Benign Brain Tumour
  • Blindness
  • Cancer (Life-Threatening)
  • Coma
  • Coronary Artery Bypass Surgery
  • Deafness
  • Dementia, including Alzheimer’s Disease
  • Heart Attack
  • Heart Valve Replacement or Repair
  • Kidney Failure
  • Loss of Independent Existence
  • Loss of Limbs
  • Loss of Speech
  • Major Organ Failure on Waiting List
  • Major Organ Transplant
  • Motor Neuron Disease
  • Multiple Sclerosis
  • Occupational HIV Infection
  • Paralysis
  • Parkinson’s Disease and Specified
  • Atypical Parkinsonian Disorders
  • Severe Burns
  • Stroke

Additionally, if coverage is purchased for a juvenile, the following 5 illnesses are also covered until age 25:

  • Cerebral Palsy
  • Congenital Heart Disease
  • Cystic Fibrosis
  • Muscular Dystrophy
  • Type 1 Diabetes Mellitus

If the ‘4 illnesses’ option is selected, the following illnesses are covered:

  • Cancer (Life-Threatening)
  • Coronary Artery Bypass Surgery
  • Heart Attack
  • Stroke

As with the ’25 illnesses’ option, if coverage is purchased for a juvenile, the same 5 additional illnesses are covered:

  • Cerebral Palsy
  • Congenital Heart Disease
  • Cystic Fibrosis
  • Muscular Dystrophy
  • Type 1 Diabetes Mellitus

To get a free quote, or if you have questions about critical illness insurance please fill out the form below.