Monday, December 13, 2010

Critical Illness insurance – why you need it

Critical Illness insurance – you need it not because you are going to die, but because you are going to live … and because you may have illness-related expenses that you may not have considered.

While you might be surprised at the growing number of Canadians who are being diagnosed with a critical illness at an increasingly early age, the good news is that medical advances are increasing life expectancy and there are much brighter prospects for surviving. Check out these statistics:
  • 70,000 Canadians suffer a heart attack each year and 1 out of 2 heart attack victims is under age 65 – but 95% survive their first attack*
  • 1 in 3 Canadians will develop some form of cancer – but 65% will survive at least five years*
  • After age 55, the risk of stroke doubles every 10 years and 1 out of 20 Canadians suffers a stroke before age 70 – but 75% will survive it*
  • Women have a 1 in 9 chance of developing breast cancer – but only a 1 in 27 chance of dying from it.**
  • Men have a 1 in 7 chance of developing prostate cancer – but only a 1 in 26 chance of dying from it**

You might expect that provincial or employee health plans will pay for all the expenses associated with critical illnesses like these but many are not covered.

The benefits of critical illness insurance are most important during the first few months after diagnosis when emotions and costs are typically at their most intense. With this type of insurance, you receive a lump sum cash payment, after a 30 day waiting period after diagnosis for any life-threatening illness covered by the policy, usually including the most common such as cancer, heart attack and stroke. The benefit is tax free under current tax legislation and yours to use any way you wish -- perhaps to pay for expenses not covered by provincial and health plans like these:
  • Many drugs or other medical expenses
  • Private treatment, a nurse, child care provider or housekeeper
  • Medical treatment outside Canada or in another province
  • Medical equipment – a wheelchair, scooter or home care bed
  • Retrofitting your home or vehicle to accommodate a wheelchair or chairlift
  • Pay off your mortgage, car loan, credit cards, lines of credit or business loans
  • Avoid dipping into your RRSP or your child’s RESP
You want to be able to focus on recovery not costs – and critical illness insurance can help you do that at a most critical time. Your professional advisor can show you how critical illness insurance can complement your other forms of insurance protection and fit into your overall financial plan.

*Disability Insurance and Other Living Benefits, CCH
**Canadian Cancer Society, 2006

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