Should you buy critical illness insurance?

Over the past few months, we've focused our attention of the blog on critical illness insurance. We went into detail about the origins of it, how much it costs, which riders are worth getting, and how underwriting for it differs from life insurance. One question remains: should you buy critical illness insurance?

Critical illness insurance definitions

The CLHIA benchmark critical illness definitions were developed in 2007 in an effort to standardize the definitions, providing a single source for insurance companies to adhere their products to, while ensuring there isn't a large discrepancy amongst them. Benchmark definitions also help consumers by removing some of the perceived complexity around critical illness definitions.

How much does critical illness insurance actually cost?

One of the reasons holding Canadians back from applying for critical illness insurance is the scarcity of online quotes. Unlike life insurance quotes, which are prevalent on many insurance brokers' websites, critical illness insurance quotes are not nearly as easy to obtain. To give you a better picture of the premium to expect for critical illness insurance, here we present four premium comparison tables, one for each of the following categories: male non-smoker, male smoker, female non-smoker and female smoker.

Critical illness insurance underwriting

Underwriting is the process that insurance companies use to evaluate the risk of an individual applying for insurance coverage. Underwriters look at factors that are relevant to the likelihood of the payout of a claim, such as smoking status, physical build and medical history. With the information, they can determine whether or not to approve an application and the premium to charge that reflects the applicant's risk. Although underwriting for critical illness is similar to underwriting for life insurance, some differences are apparent enough that they merit attention.

Protect your retirement plan from the cost of a critical illness

A major health event is more common than you may think. 2 out of 5 Canadians will develop cancer during their lifetimes, with 69% of new cancer cases occurring between age 50-79. 9 in 10 Canadians have a risk factor for heart disease or stroke. Fortunately, our chances of surviving a major health event is greater than ever. What we may not be prepared for is the elevated financial stress following the event and the impact it will have on our retirement plans.

The history of critical illness insurance

Dr. Marius Barnard, the heart surgeon who was part of the team that performed the first human-to-human heart transplant in South Africa in 1967, was also the person credited for inventing critical illness insurance. No, an insurance company did not come up with the concept of critical illness insurance. Rather, it was a doctor who saw the financial difficulty of his patients who survived heart surgery. As a heart surgeon, he helped many patients make a full recovery from their illnesses, but at the same time saw them suffer financially in the years to follow.