CRITICAL ILLNESS INSURANCE

Everyone knows someone affected with a critical illness. You probably know colleagues, relatives, or friends you went to school with who have undergone chemotherapy or radiation treatment for cancer, or who have had heart surgery. They have survived the critical illness and may be working, traveling and enjoying life again. But their lives, and those of their families and business associates, have often been profoundly affected.

When you survive 30 days following the diagnosis of a critical illness, critical illness insurance provides you with a lump sum tax free cash benefit.

Critical Illness Insurance was developed by Dr. Marius Barnard (brother of Christian Barnard, who performed the first successful open heart transplant surgery) in South Africa in 1983. Dr. Barnard saw a need for insurance that paid a "living benefit" to those who survived a major illness to offset lost income and pay additional expenses. Critical Illness insurance is a form of protection that provides immediate funds to you upon diagnosis of a covered condition, like cancer, stroke, or a heart attack. Unlike other types of insurance that provide income replacement if you are seriously ill, critical illness insurance provides a lump sum tax-free benefit that can be used in any way you choose with no restrictions or claw-backs to benefits. 

Some Immediate Financial consequence when you suffer from a critical illness include:

1. Absence from work – You may be covered under disability insurance program and receive a portion of income each month you are not able to work. Disability insurance helps you to cover household expenses, but serious critical illness could be life altering. Receiving only a portion of your income may not be enough. Critical Illness can fill the gap.
    
2. The costs for home care during a period of illness and recovery – Your working spouse  may need to take a leave of absence to care for you or you may have to pay for private home care. With shorter hospital stays, you may find that home and private hursing care services are required to speed the recovery.
    
3. Treatment outside of Canada or other medical costs not fully covered under the provincial health plan – Critical Illness insurance can enable you to obtain treatment outside of Canada or pay for experimental treatment not covered under a health care plan.
    
4. Children’s education – A life altering illness can impact your ability to save for your children’s education. Critical illness insurance can fund your children’s education.
    
5. Early Retirement – If a critical illness results in early retirement or even a change in careers or reduced number of hours, your RSP savings may not be enough to support you 

Critical Facts

Age to Qualify	Critical Illness insurance is available to individuals between the ages of 18 – 65
Amounts Available	Benefits range from $25,000 up to $2,000,000
Who receives the Benefit?	Most critical illness benefits are paid directly to the individuals insured under the plan and they decide how they wish to use the benefit. Payment of benefit is based on the medical diagnosis of a certified Canadian physician or specialist for the specific condition. Payment is not dependent on your inability to work
Coverage Terms	Most plans cover you until age 75, some companies also have plans available for coverage till age 100
When are benefits payable?	The Critical Illness Benefit is pay when you are diagnosed with a Covered Condition and you survive 30 days
Other Information	Other programs included in some Critical Illness Plans include: Best Doctors, and dialing living assistance

Grouped Critical Illness

Grouped Critical Illness insurance will allow the employer to put together a common plan whereby two or more employees are covered by individual Critical Illness policies. This is NOT a group insurance plan, as it does not consist of a single contract with several insured employees. As the employer, you are the owner of the plan and pay the premiums for the individual policies for your employees. These premiums are tax-deductible. Each employee is covered by a policy and is also the beneficiary. The premiums you pay are not taxable to the employee. The employer will determine the type of coverage and amount of the benefit received should an employee be diagnosed with one of the covered illnesses.

Advantages for the Employer and Employees

Employer	Employee
Premium deductible as an expense	Non-taxable benefit where employer pays premium for employee
Way to reward current employees and attract new ones	Should a claim be made, the benefit is not taxed
Opportunity to offer a product not widely offered through group insurance plans	If the employee changes employer, the employee can assume the policy by continuing to pay the premiums at the same cost and with no modifications to the policy

For more information please contact us at at 604.687.7773 or email solutions@customplanfinancial.com