How much does critical illness insurance actually cost?

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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. Monthly premiums are shown for $100,000 of coverage for the most common products at different ages. Here is a short description of each product:

Term-10: The most basic term product, with premiums increasing every 10 years until age 75, at which point the policy expires. The premiums shown in the tables below are for the first 10 years only.

Term-20: Instead of increasing every 10 years, the premium for term-20 products go up every 20 years. Like term-10, term-20 also expires at age 75. Fewer insurance companies carry this product compared to term-10. Both term-10 and term-20 can be converted to term-to-75 or term-to-100, if the insurance company offers them. The premiums shown in the tables below are for the first 20 years only.

Term-to-75: A term policy that provides a guaranteed level premium and expires at age 75. Some companies have an option for a shorter pay period, such as 15 years or until age 65. While premiums will be higher since the payment period is shorter, these options allow the insured to stop paying during retirement. The premiums shown in the tables below are for the pay until age 75 option.

Term-to-100: Although it has term in its name, term-to-100 actually provides coverage for life, with guaranteed level premium payable to age 100 and no cash values. This product is popular for people who want permanent coverage even during retirement, when a critical illness is most likely to happen. Similar to term-to-75, shorter premium payment period options exist for certain insurance companies. The premiums shown in the tables below are for the pay until age 100 option.

 

December 2014 Male non-smoker CII

December 2014 Male smoker CII

 

December 2014 Female non-smoker CII

December 2014 Female smoker CII

Keep in mind that comparisons should not only be made with regards to premium. It’s also prudent to compare the number of conditions covered by an insurance company’s product as well as the definition used by the company. Most policies cover about two dozen conditions, but some have more while others may cover less. For example, Assumption Life’s product only covers 16 conditions. The definition of a covered condition will also affect your approval rate for a claim, since a more stringent definition is more likely to result in denial than one that is less strict.

Some companies also include riders in the policy automatically, such as Empire Life and their Return of Premium on Death rider. So if you are presented with 2 products with equal premium, check to see if any riders are already included.

Also, some insurance companies offer two products: a comprehensive policy covering approximately two dozen conditions, and a simple policy that only covers the basic 3 or 4 illnesses (cancer, heart attack, stroke, coronary bypass surgery). There is a slight difference in pricing between the two products, so make sure you’re doing a proper comparison.

Like we mentioned in the cost of life insurance post, it’s important to compare the premiums beyond the first 10 or 20 years of the policy, since it may differ drastically even if the initial term’s premium are similar.

After seeing the premiums for all sorts of products for yourself, are they in line with your expectation? Or were you expecting something entirely different? More importantly, how do you budget for critical illness insurance now that you know the true cost?