Critical Illness: Benefits, Uses, and Key Considerations

Critical illnesses have the potential to completely alter your life. In addition to the physical and emotional burden that a critical illness leads to, there is a financial toll that should be considered when preparing for future contingencies. When planning for a potential health event, critical illness insurance (CI) is an essential tool that should be considered. CI acts as a financial safety net at the onset of a covered critical illness   giving you the peace of mind to focus on your recovery without the added stress of financial concerns.

Advantages of Critical Illness Insurance

CI pays a lump sum benefit generally 90 days after the diagnosis of a covered illness.  There are approximately 25 illnesses that can be covered with the most important of which being heart attack, stroke and cancer. 

Advantages of CI coverage are as follows:

Financial Security

CI provides financial support to help cover medical expenses, replace lost income, and maintain your quality of life.

Flexibility

You can use the lump-sum benefit as you see fit such as paying for treatments, covering everyday expenses, or modifying your home to enable comfortable recovery.

Peace of Mind

Knowing that you have a financial safety net in place can alleviate stress and allow you to prioritize your health and well-being during a difficult time.

Tax-Free Benefit

The benefit from personally owned CI is received tax-free, allowing you to use the full amount to support your needs.

Uses of Critical Illness Insurance

Medical Costs

CI benefits may cover the costs of treatments, medications, surgeries, and specialized care that may not be fully covered by your health insurance plan.

Example: a stroke may render the insured life bed-bound, requiring the assistance of nursing care at home.

Income Replacement

CI can be used to cover your financial obligations, such as mortgage payments or rent, if you are unable to work due to your illness.

Example: A self-employed individual uses the benefit to cover their business expenses while they recover from a major organ transplant.

Home Modifications

The CI benefit can be used to make necessary changes to your home to accommodate your needs during recovery.

Example: Installing a stairlift and widening doorways if a critical illness causes mobility issues, such as Amyotrophic Lateral Sclerosis (ALS).

Rehabilitation and Therapy

The CI benefit can pay for rehabilitation services and therapies to support your recovery.

Example: Paying for weekly physiotherapy sessions for a year following a major stroke.

Family Support

CI benefits can be used to ensure your family is taken care of financially while you focus on your recovery.

Example: Covering childcare expenses or helping with your children's education costs.

Travel Expenses

The CI benefit can be used to cover the cost of travel for medical treatment or to be closer to family and friends for support.

Example: Travelling to a specialized chemotherapy center to treat a recent cancer diagnosis.

Key Considerations

Coverage Amount

The coverage amount should be sufficient to cover your potential expenses and income needs during recovery.

Covered Illnesses

Review the list of covered illnesses in the policy to ensure it aligns with your needs and concerns.

Policy Features

Consider additional features such as return of premium options (whereby all of paid premiums are refunded if the end of the coverage period is reached without a claim) or the ability to add riders for additional coverage.

Affordability

CI premiums  vary depending on your age, gender, smoking status, health history, coverage amount and policy features. It's important to find a policy that fits your budget while providing adequate coverage.

Conclusion

A critical illness can have a devastating impact on your life and finances. CI provides a vital safety net, offering financial security and peace of mind during a challenging time. By securing critical illness coverage, you can focus on your health and recovery while protecting your loved ones from financial hardship.

At Differentiated Solutions, we are committed to helping you find the right insurance solutions to protect your future. Schedule a call with our team to learn more about CI and how it can benefit you and your family.