Defining Critical Illness Insurance

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Defining Critical Illness Insurance

Defining Critical Illness Insurance

What is critical illness insurance? Critical illness insurance or critical illness is a health insurance product in which the insurer (the insurance company) is contracted to make a lump sum, tax free payment in the insured (the one whos life is protected from a critical illness) is diagnosed with one of a list of insured illnesses.

In Canada a critical illness policy is often structured to pay out 30 days after diagnosis of a critical illness. The payment is made lump sum and tax free. That means the total amount of insurance the policy is for (like $100,000 or $250,000) is paid out to the policyholder as a single cheque. The benefit or claim of a critical illness insurance policy is considered a health benefit by the Canada Revenue Agency (CRA) and is therefore a tax free payment.

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Most frequent insured illnesses under a critical illness policy

The following list is the most common list of all critical illness includedby insurance companies. Some companies may have a few more or less illness covered in their list of included conditions.

Alzheimers Disease

Aortic Surgery

Aplastic Anaemia

Bacterial Meningitis

Benign Brain Tumour

Blindness

Coma

Coronary Artery Bypass Surgery

Deafness

Heart Attack

Heart Valve Replacement

Kidney Failure

Life-Threatening Cancer

Loss of Limbs

Loss of Speech

Major Organ Transplant on Waiting List

Major Organ Transplant

Motor Neuron Disease

Multiple Sclerosis

Occupational HIV Infection

Paralysis

Parkinsons Disease

Severe Burns

Stroke

Although this list might not cover every possible conditionyou might undergo, it includes the most usual condition. 89% of all critical illness insurance claims come from the four pointed out illnesses; bypass surgery, heart attack, life-threatening cancer, and stroke.

Minor covered illnesses and partial payouts

There are several non-life threatening types of cancer or heart conditions that will not pay out the full critical illness benefit. These condition (usually|commonly|generally) have a partial payout from the insurer. A partial payout is (usually|commonly|often) 10% of the total critical illness benefit. Some insurance companies will lower your total critical illness benefit when claiming a partial payout, and others will keep you benefit whole.

Here is an outline of the most common partial payout included conditions:

Early Prostate Cancer: Stage T1a and T1b prostate cancer

Ductal Breast Cancer: defined as the presence of ductal carcinoma in situ of the breast as confirmed by a biopsy

Superficial Malignant Melanoma: a malignant melanoma on the skin that has not penetrated the fist layer of skin.

Coronary Angioplasty: undergoing the intervention procedure to unblock or widen a coronary artery that produces blood to the heart.

Standardized definitions of illnesses in Canada

Canadian insurance companies had to define what is critical illness insurance and what makes up a diagnosis for a critical illness that warrants a payout. In 2005, at the World Critical Illness Conference, all Canadian insurers embraced the internationally agreed upon standardized definitions for a covered critical illness. This means that the insurance companies and critical illness insurance policies in Canada represent the standard Canadian and international medical associations standard definitions of what makes up an illness. This also {includes standard and acknowledged testing procedures for illnesses to confirm a diagnosis.

Usually a diagnosis of an illness must be carried out by a specialist in the field, like a cardiologist or oncologist. Once a diagnosis of a critical illness is done by a Canadian doctor, that diagnosis will be instantly accepted by the insurance company, which is using the standard definitions of critical illnesses as the medical profession.

The need for critical illness insurance

A lot of people are concerned with protecting themselves and their loved ones in case of a critical illness or injury that could critically affect their financial plan and savings. Here are some basic statistics of the risk each Canadian has of getting a critical illness:

One in three will develop life threatening cancer in their lifetime

50% of all heart attack victims is under age 65

31% of all deaths in Canada are cardiac related

80% of people will survive their first heart attack

There are 50,000 new stroke victims in Canada each year, and 75% of them will be left with a disability

We can not deny statistically that the risks are real. The right question is do you believe it's possible to happen to you, and if so, {would you want financial protection? Here are several ways you could make use of the benefits of a critical illness insurance policy:

Pay for the cost of out of Canada health care

Pay off debts, like a mortgage and line of credit

Pay for additional health care supports and recovery assistance, like in home care

Replace lost income from time off work
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Fund a lifestyle change like renovations to accommodate a disability

What is Critical Illness Insurance learn more from Life Guard Insurance

If you are interested in safeguarding your finances and way of life from a critical illness then critical illness insurance might be perfect for you. Feel free to contact Life Guard Insurance to answer the question what is critical illness insurance for your unique financial {situation|condition|circumstance).

by: Mitch Reynolds

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