10 Reasons to Get Critical Illness Insurance

Despite living a healthy lifestyle, we are all vulnerable to unexpected illnesses. If the pandemic has taught us anything it’s that even certain types of flu or colds can lead to ongoing health issues creating critical illnesses that keep us from working. A diagnosis of cancer and other critical illnesses impacts your life, with long and difficult treatment that keeps you from working. As a result, your ability to recover can be affected. Critical illness insurance is designed to provide financial support when you are faced with recovery from serious illness. Here, we offer 10 reasons you should have critical illness insurance.

1. Critical illness risk is higher than you think

Many people think if they eat the right foods and lead a healthy lifestyle, they can’t get sick. Unfortunately, in 2020, 617 Canadians were diagnosed with cancer every day. This is a scary statistic to wrap your head around, but it is a reality-check showing us that we are at higher risk of critical illness than we might think. It’s not just cancer: in the same year, 35,000 people suffered from cardiac arrest, and 62,00 people had strokes. Although these numbers are scary, the good news is the odds of survival improve for critical illnesses each year. However, it still means you or a loved one will be unable to work during the recovery process, which is why critical illness insurance is so important.  

2. Health care is expensive

While OHIP covers the most expensive elements of healthcare for those with critical illness in Ontario, there are other unexpected expenses involved including:

• Medication
• Rehabilitation therapy
• In-home care
• Childcare costs (if you are the main provider)
• Lost wages
• Mental health support and therapies

When you become critically ill, chances are you will need to deal with some of these expenses out of your own pocket. The added financial stress can interfere with your ability to recover quickly. It also puts you at risk of having to refuse certain treatments that could impact your level of recovery due to lack of finances. You could also lose your home, or have to move to a smaller or less safe form of shelter when your finances are stretched to their limit.

3. Everyone needs critical illness insurance

Unless you have an impressive 100% health benefits package at work, or are independently wealthy, you need critical illness insurance. The best way to determine if you need critical illness insurance is to consider the following questions:

• How long will your savings last if you are unable to work?
• Can you afford medical expenses on top of your current financial obligations?
• Who will be impacted if you lose your income during your illness?
• What other financial stress will you face if you become ill, such as paying for childcare, having someone cook and clean for you, paying for medications, etc.?

These questions will help show you how financially capable you are to manage the additional burdens without critical illness insurance. It becomes even more important if you are the main income earner or caregiver in your family.

4. You might not have disability insurance

Many people assume they have disability insurance or employee benefits at work. However, it is never safe to assume this will be enough to cover critical illness expenses. Speak to your employer and make sure you understand what type of disability insurance (if any) you have. Look into the following:

• What type of disability insurance do you have?
• What is the maximum benefit amount?
• Are there limits on how long the benefits will be paid out?
• What are the deductibles?
• Is there a waiting period before payments are made?
• What illness or conditions does the disability insurance apply to?

If you will only receive a very low percentage of your income, or can only receive benefits for a limited amount of time, then critical illness insurance will fill the gaps. It will also provide payments if there is a waiting period before you can receive your benefits.

5. It doesn’t cost as much as you think

Many people don’t opt for critical illness insurance because they think it is too expensive. However, your premiums are probably not as much as you think. You have many options to choose from. You can also see discounts if you negotiate to include critical illness insurance with your current insurance bundle.

6. Now is the best time to act

The younger and healthier you are when you get your critical illness insurance, the lower your premiums. If you keep putting it off, you will increase the risk for paying higher premiums or even being declined. As well, you can’t qualify for critical illness insurance once a diagnosis is made.

7. Some policies offer cash back

Some critical illness insurance plans allow you to receive a portion of your premiums after paying into it for a certain amount of time. In Canada, there are policies that allow you to cancel the policy and receive a certain percentage back because you did not make a claim. In other cases, you can receive payment and still continue to have coverage.

8. Accessing your home equity eats into your retirement

If you own a home and figure you can just access your home equity for a loan, you are eating into your retirement savings. You want to know that you won’t be paying down your home equity loan into your retirement years, as the cost of living will only continue to rise. It is just smart financial planning to avoid the need to access your home equity because this takes away from a stable financial future.

9. Changing healthcare coverage

You never know what changes the government might make to your current healthcare coverage. There is constant talk of going to a private healthcare model, which will greatly impact your ability to cover your bills. As well, while you might be employed with an exceptional package right now, the economy could lead to changes to your benefits as employers try to find ways to reduce costs.

10. Peace of mind

Critical illness insurance allows you to have peace of mind today, and also if you should need to use it. Critical insurance takes away the stress of worrying about medical bills so you can focus on getting better. For more information about critical illness insurance in Ottawa, speak to our team at Oegema, Nicholson & Associates today.