Is critical illness insurance worth it in 2024?

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Alexandre Desoutter updated on 6 May 2024

Did you know that annually, over 20,000 Canadians face cancer diagnoses, and daily, 95 grapple with heart attacks, while 16 endure strokes? Beyond health concerns, these illnesses often bring substantial financial and emotional burdens.

Enter critical illness insurance—a vital safety net offering financial support and peace of mind, helping you manage the costs associated with major health challenges, especially the 'Big Four' illnesses. But is critical illness insurance worth it? Let's find out!

Let's explore how it works, its costs, and the process of obtaining a policy in this guide. We've also put together a comparator tool for you to explore the best critical illness insurance plans in Canada and get personalized quotes based on your needs. It's free to use and gives you results in no time.

Is critical illness insurance worth it Canada? Key takeaways

  1. 20,000+ Canadians are diagnosed with critical illness conditions every year.
  2. Critical illness insurance offers a lump sum for diverse expenses during major illnesses.
  3. Policies differ but commonly cover conditions such as heart attack, cancer, paralysis, and stroke.
  4. Unlike disability insurance, critical illness payouts can be used flexibly for various needs.
  5. Critical illness insurance is particularly important for older individuals or those with dependents.

What is critical illness insurance?

Critical illness insurance is a type of insurance that pays out if you suffer from a major illness, particularly the Big 4 including heart attack, stroke, cancer, and coronary bypass surgery. Critical illness does not cover direct medical costs. The aim of critical illness insurance, be it BMO critical illness insurance, Canada Life critical illness insurance, or another provider, is to financially support the policyholder if they are unable to work, or burdened by extra costs.

Because it is indeed expensive to get sick. While you may have your healthcare costs covered, have you considered all the other ways that bills can rack up? Travelling to and from the hospital for regular appointments and check-ups can be expensive as are home equipment and home help. Someone who is sick over a long period may struggle to work and find themselves overwhelmed with costs.

So, this is where critical illness insurance comes in handy, by offering you a lump sum to help you navigate such situations.

You can take a look at the best critical illness insurance plans in the market, compare them, and get free personalized quotes, all by simply using our free comparator below.

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What does critical illness insurance cover?

Every insurance policy is different and you should be sure to carefully read through the terms and conditions, paying particular attention to the exclusions. The small plans may cover only 3 or 5 conditions, while the most generous more than 25. The most common illnesses covered, however, are:

  • Coronary bypass
  • Heart attack
  • Life-threatening cancer
  • Paralysis
  • Renal failure
  • Stroke

But you may ask why not disability insurance? One advantage of critical illness insurance vs disability insurance is that the critical illness payout can be used with greater flexibility. Let's take a look at some examples of what people use the money for:

  • Alternative treatments or specialists not covered by a health policy.
  • Counselling
  • Daily expenses
  • Installation of mobility equipment or ramps
  • Retrofitting cars for accessibility
  • Transportation expenses

How much does critical illness insurance cost?

When weighing whether critical illness insurance is worth it for you, you need to look at the cost. The cost will vary depending on several factors. The three most important are:

  • your age
  • your general state of health
  • the amount of coverage you require

The insurance provider will also make a difference. So Sun Life critical illness insurance may not cost you the same as a policy from iA Financial. Therefore, we have put some rough monthly premium costs into the table below to help you get an idea. Their estimates are for a $50,000 cover, for a non-smoker.

Age Monthly premium
Under 25
$14
26 to 30
$14.50
31 to 35
$17
36 to 40
$19
41 to 45
$25
46 to 50
$35
51 to 55
$53
56 to 60
$88
61 and up
$111
Critical illness monthly premium cost

It's important to get personalized quotes and compare multiple providers before buying a policy. You can do it right here using our free comparator below.

Find a critical illness insurance policy that's right for you

Get quotes in just seconds

What are the pros and cons of critical illness insurance?

When considering whether you want to get critical illness insurance it is worth knowing what the advantages and disadvantages are. Let's take a look:

The advantages of critical illness insurance?

  • You will be covered for expenses that you rack up if you get sick
  • You have peace of mind that your finances could withstand a serious illness
  • You do not have to worry about continuing to work if you are sick
  • Your dependents can be provided for

What are the disadvantages of critical illness insurance?

  • Exclusions are strict and not all illnesses are covered
  • Smokers and drinkers have to pay higher premiums
  • It is difficult to get coverage after the age of 65

For an alternative to critical illness insurance, you could also consider looking at disability insurance or life insurance options.

Is critical illness insurance worth it?

Critical illness insurance is a lifesaver if you do not have enough money to cover expenses if you fall ill. Illness is expensive and a critical illness insurance policy will give you a large cash payment to help you weather the financial storm of a serious diagnosis. This can make the difference in paying for out-of-pocket health care and ongoing household expenses during recovery.

To answer whether it is worth purchasing critical illness insurance for you let's look at some examples.

Example 1

Keep in mind

Agatha, 54, is thinking about buying critical illness insurance in Vancouver. She is a non-drinker and smoker but has a history of breast cancer in her family. Agatha has a husband and one son. Her primary goal is to make sure that if she were to fall ill the burden of looking after her financially would not have to come out of her husband's income. Agatha should look into finding the right critical illness insurance for her.

Example 2

Keep in mind

Bernice, 25, is thinking about buying critical illness insurance in Toronto. She is a social smoker so her premiums would be higher than the average. Bernice has no dependents currently and his primary goal is to have money set aside in case she gets sick and can no longer work as a waitress. Bernice may be better served by buying disability insurance.

As we see from these examples, critical illness insurance makes the most sense for older people who may be more likely to get ill or people with dependents. It best serves not as a replacement for income but as a supplement to other income and insurance protection. That coverage can be life-changing for those who need it. To have extra peace of mind, you could consider combining it with accident and dismemberment insurance.

How much critical illness insurance do I need?

Use our critical illness insurance calculator to estimate your costs and find the right policy for you.

Once you know how much critical illness insurance you need, you can explore plans based on your unique preferences right here. Use our free comparator below to compare the best critical illness insurance plans in Canada and get personalized quotes in no time.

Find a critical illness insurance policy that's right for you

Get quotes in just seconds

How to get the best deal on critical illness insurance?

  1. Shop Around: Compare offerings from different insurance providers to find the best deal tailored to your needs and budget. Use our free comparator.
  2. Read Terms and Conditions: Carefully review policy details, paying attention to exclusions. Understanding the fine print ensures you get coverage suitable for your circumstances.
  3. Consider Your Needs: Assess your age, general health, and desired coverage amount. Tailoring the policy to your specific situation can lead to a better deal.
  4. Seek Professional Advice: Consult with insurance experts or advisors to gain insights into the market and make informed decisions. Their expertise can help you find the most cost-effective and comprehensive critical illness insurance.
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Alexandre Desoutter
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Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.