People buy Critical Insurance to replace income that has stopped as a result of a Critical Illness, and to pay for new expenses that may be incurred as a result of the illness. Critical Illness Insurance is relatively new in Canada. It was invented and first introduced in 1983 in South Africa by Dr. Marius Barnard as a top-up benefit to medical expense policies, and has only recently been available in Canada. Dr. Barnard recognized that many people were recovering from surgeries, that in earlier years would not have been conducted. (His brother Dr. Christian Barnard was a pioneer in heart transplant surgery). The additional life expectancy came with a cost, however, as frequently the patient could not continue to work, and had seriously depleted any savings they may have had to find medical and recovery expenses.
Critical Illness Insurance provides a one-time, lump sum, tax-free cash payment, if you suffer a Critical Illness, and survive for 30 days. Disability Insurance pays a portion of your monthly income, until the insurance company decides that you have recovered.
Your doctor, rather than the insurance company, decides whether you have suffered a Critical Illness.
Awareness of Canadian statistics regarding critical illness experience
Extent of coverage varies by company
Definitions and Interpretations of critical illness
The purchase of Critical Illness Insurance is complex, and is relatively new in Canada. Hatch & Muir are Chartered Life Underwriters and Certified Financial Planners. We can provide you with advice and help you choose the right Critical Illness insurance contract.
Robin Muir, CFP®, CLU®, CH.F.C.