Critical Illness Insurance – What Does it Cover?

What Does Critical Illness Insurance Cover?

Critical illness insurance is a unique type of policy that provides you with a lump sum payment if you are diagnosed with specific illnesses. You have the freedom to use this lump sum however you choose, whether for medical treatment or other personal expenses. It’s important to note that critical illness insurance differs from disability insurance, which offers regular monthly payments.

The illnesses covered by critical illness insurance are explicitly defined in the policy and can range from just heart attack, cancer, coronary artery bypass surgery, and stroke, to approximately 25 different critical illnesses.

When considering critical illness insurance, it’s crucial to understand the associated risks. Canadians are more likely to face a critical illness than to pass away before the age of 75. Here is an overview of the leading causes for critical illness insurance claims:

CancerHeart AttackStrokeCoronary artery bypass surgeryMultiple sclerosisOther critical illnesses70%14%5%4%2%5%

Difference Between Critical Illness Insurance: Definitions Across Different Providers

Critical Illness definitions can vary among providers, but there are standardized definitions among certain carriers, particularly those following industry guidelines.  While there are some standardized definitions among certain carriers, there can still be variation in definitions from provider to provider. However, many insurers must set guidelines by industry organizations or regulatory bodies to ensure consistency in defining critical illnesses. Subtle differences in definitions may exist, so it is essential to review the specifics of each policy to understand what conditions are covered.

Here is an overview of what is covered by different providers. It is easy to see that the lists of critical illnesses are nearly identical across various providers. Most of them offer a basic version of the policy (shown here in orange) that covers only 4-5 main critical illnesses, and an enhanced version of a policy (shown here in yellow) that covers 25-26 critical illnesses.

Expert inputs: Nabila Sabir

Nabila Sabir is a sales consultant for Living Benefits with nearly 30 years of experience in the insurance industry. Prior to RBC Insurance, she held numerous roles in the life insurance space with Manulife, PPI Solutions, Equitable Life, and Maritime Life. She is highly knowledgeable about different aspects of living benefits, including sales, marketing, underwriting, policy changes, and claims.

Nabila holds a Chartered Life Underwriter license from The Institute for Advanced Education. Furthermore, she has completed the Life License Qualification Program (LLQP) and holds a CHS designation (Certified Health Insurance Specialist).

Critical Illness definitions can vary among providers, but there are standardized definitions among certain carriers, particularly those following industry guidelines.  While there are some standardized definitions among certain carriers, there can still be variation in definitions from provider to provider. However, many insurers must set guidelines by industry organizations or regulatory bodies to ensure consistency in defining critical illnesses. Subtle differences in definitions may exist, so it is essential to review the specifics of each policy to understand what conditions are covered.

Here is an overview of what is covered by different providers. It is easy to see that the lists of critical illnesses are nearly identical across various providers. Most of them offer a basic version of the policy (shown here in orange) that covers only 4-5 main critical illnesses, and an enhanced version of a policy (shown here in yellow) that covers 25-26 critical illnesses.

Expert inputs: Nabila Sabir

Nabila Sabir is a sales consultant for Living Benefits with nearly 30 years of experience in the insurance industry. Prior to RBC Insurance, she held numerous roles in the life insurance space with Manulife, PPI Solutions, Equitable Life, and Maritime Life. She is highly knowledgeable about different aspects of living benefits, including sales, marketing, underwriting, policy changes, and claims.

Nabila holds a Chartered Life Underwriter license from The Institute for Advanced Education. Furthermore, she has completed the Life License Qualification Program (LLQP) and holds a CHS designation (Certified Health Insurance Specialist).

RBC InsuranceIndustrial AllianceEmpire LifeSun LifeManulife1. Acquired brain injury due to external trauma1. Aortic Surgery1. Aortic surgery1. Aortic surgery2. Aortic surgery1. Aortic surgery2. Aplastic Anaemia2. Aplastic anemia2. Aplastic anemia3. Aplastic anemia2. Aplastic anemia3. Bacterial Meningitis3. Bacterial meningitis3. Bacterial meningitis4. Bacterial meningitis3. Bacterial meningitis4. Benign Brain Tumour4. Benign brain tumour4. Benign brain tumour5. Benign brain tumour4. Benign brain tumour5. Blindness5. Blindness5. Blindness6. Blindness5. Blindness6. Cancer (Life Threatening)6. Cancer (life-threatening)6. Cancer (Life Threatening)7. Cancer6. Cancer (Life-Threatening)7. Coma7. Coma7. Coma8. Coma7. Coma8. Coronary Artery Bypass Surgery8. Coronary artery bypass surgery8. Coronary Artery Bypass Surgery9. Coronary Artery Bypass Surgery8. Coronary Artery Bypass Surgery9. Deafness9. Deafness9. Deafness10. Deafness9. Deafness10. Dementia including Alzheimer’s Disease10. Dementia, including Alzheimer’s disease10. Dementia, including Alzheimer’s disease11. Dementia, including Alzheimer’s disease10. Dementia, including Alzheimer’s disease11. Heart Attack11. Heart attack11. Heart Attack12. Heart Attack11. Heart Attack12. Heart Valve Replacement or Repair12. Heart valve replacement or repair12. Heart valve replacement or repair13. Heart valve replacement or repair12. Heart valve replacement or repair13. Kidney Failure13. Kidney failure13. Kidney failure14. Kidney failure13. Kidney failure14. Loss of Independent Existence14. Loss of independent existence14. Loss of independent existence15. Loss of independent existence15. Loss of Limbs15. Loss of limbs15. Loss of limbs16. Loss of limbs14. Loss of limbs16. Loss of Speech16. Loss of speech16. Loss of speech17. Loss of speech15. Loss of speech17. Major Organ Failure on Waiting List17. Major organ failure on waiting list17. Major organ failure on waiting list18. Major organ failure on waiting list16. Major organ failure on waiting list18. Major Organ Transplant18. Major organ transplant18. Major organ transplant19. Major organ transplant17. Major organ transplant19. Motor Neuron Disease19. Motor neuron disease19. Motor neuron disease20. Motor neuron disease18. Motor neuron disease20. Multiple Sclerosis20. Multiple sclerosis20. Multiple sclerosis21. Multiple sclerosis19. Multiple sclerosis21. Occupational HIV Infection21. Occupational HIV infection21. Occupational HIV infection22. Occupational HIV infection20. Occupational HIV infection22. Paralysis22. Paralysis22. Paralysis23. Paralysis21. Paralysis23. Parkinson’s Disease and Specified Atypical Parkinsonian Disorders23. Parkinson’s disease and specified atypical parkinsonian disorders23. Parkinson’s disease and specified atypical Parkinsonian disorders24. Parkinson’s disease and specified atypical Parkinsonian disorders22. Parkinson’s disease and specified atypical Parkinsonian disorders24. Severe Burns24. Severe burns24. Severe burns25. Severe burns23. Severe burns25. Stroke25. Stroke (cerebrovascular accident)25. Stroke (cerebrovascular accident)26. Stroke (cerebrovascular accident)24. Stroke (cerebrovascular accident)Legend:Basic policy: covers 4 critical illnessesCI PROTECT policy: covers 4 critical illnessesLifecheque®
Basic: covers 5 critical illnessesCritical Illness
Recovery Plan policy: covers 25 critical illnessesStandard policy: covers 25 critical illnesses (also includes 4 conditions covered by a basic policy)CI PROTECT PLUS policy: covers 25 critical illnesses (also includes 4 conditions covered by a basic policy)SUN CRITICAL ILLNESS INSURANCE policy: covers 26 critical illnessesLifecheque®: covers 24 critical illnesses (also includes 5 conditions covered by a basic policy)

Definitions of various conditions are nearly identical. See our comparison of select conditions.

Critical IllnessRBC InsuranceIndustrial AllianceEmpire LifeSun LifeComaComa means the definite diagnosis of a state of unconsciousness with no reaction to external stimuli or response to internal needs for a continuous period of at least ninety-six (96) hours, and for which period the Glasgow coma score must be four (4) or less. The diagnosis of Coma must be made by a specialist.A definite diagnosis of a state of unconsciousness with no reaction to external stimuli or response to internal needs for a continuous period of at least 96 hours, and for which period the Glasgow coma score must be 4 or less. The diagnosis of coma must be made by a specialistComa means a definite Diagnosis of a state of unconsciousness with no reaction to external stimuli or response to internal needs for a continuous period of at least 96 hours, and for which period the Glasgow coma score must be 4 or less.Coma means the definite diagnosis of a state of unconsciousness with no reaction to external stimuli or response to internal needs for a continuous period of at least ninety-six (96) hours, and for which period the Glasgow coma score must be four (4) or less. The diagnosis of Coma must be made by a specialist.ParalysisParalysis means the definite diagnosis of the total loss of muscle function of two (2) or more limbs as a result of an accidental injury or disease to the nerve supply of those limbs for a period of at least ninety (90) days following the precipitating event. The diagnosis of Paralysis must be made by a specialist.A definite diagnosis of the total loss of muscle function of two or more limbs as a result of injury or disease to the nerve supply of those limbs, for a period of at least 90 days following the precipitating event. The diagnosis of paralysis must be made by a specialist.Paralysis means a definite diagnosis of the total loss of muscle function of two or more limbs as a result of injury or disease to the nerve supply of those limbs, for a period of at least 90 days following the precipitating event.Paralysis means the definite diagnosis of the total loss of muscle function of two or more limbs as a result of an accidental injury or disease to the nerve supply of those limbs for a period of at least 90 days following the precipitating event. The diagnosis of paralysis must be made by a specialist.Severe burnsSevere Burns means the definite diagnosis of third degree burns over at least twenty percent (20%) of the body surface. The diagnosis of Severe Burns must be made by a specialist.A definite diagnosis of third-degree burns over at least 20% of the body surface. The diagnosis of severe burns must be made by a specialist.Severe burns means a definite diagnosis of third-degree burns over at least 20% of the body surface.A definite diagnosis of third-degree burns over at least 20% of the body surface. The diagnosis of severe burns must be made by a specialist.

Critical Illness Insurance and Existing Critical Illness Pre-conditions

Insurers typically have guidelines regarding pre-existing conditions or existing critical illnesses. In many cases, these conditions may be excluded from coverage, meaning that if you have a pre-existing condition or are diagnosed with a critical illness before obtaining the policy, you may not receive benefits related to that condition. However, exclusions can vary among insurers, so it’s crucial to review the policy terms and any exclusions carefully.

Critical Illness Insurance: Age Cut Offs

The cut off age for issuing critical illness insurance policies varies among carriers, but generally 60 is the limit. This means that individuals above age 60 age may find it more challenging to obtain a new policy.

Having Multiple Critical Illnesses: How Does This Impact Your Application?

Having multiple critical illnesses may decrease your chances of obtaining a policy, as insurers assess risk based on various factors, including existing health conditions. However, some insurers may offer coverage with certain limitations or exclusions for individuals with multiple critical illnesses.

Expert inputs: Alfred Moreno

Alfred Moreno is a Life and Living Benefits specialist with RBC Insurance. He has spent nearly 10 years in the living benefits space and is knowledgeable about the details and intricacies of various insurance products. He also expanded his professional horizons during his time with Allianz, one of the largest insurance providers worldwide. He completed his education at De La Salle University and the University of Santo Tomas.

Having multiple critical illnesses may decrease your chances of obtaining a policy, as insurers assess risk based on various factors, including existing health conditions. However, some insurers may offer coverage with certain limitations or exclusions for individuals with multiple critical illnesses.

Expert inputs: Alfred Moreno

Alfred Moreno is a Life and Living Benefits specialist with RBC Insurance. He has spent nearly 10 years in the living benefits space and is knowledgeable about the details and intricacies of various insurance products. He also expanded his professional horizons during his time with Allianz, one of the largest insurance providers worldwide. He completed his education at De La Salle University and the University of Santo Tomas.

Standard Critical Illnesses vs Basic Critical Illness insurance policies: Is it Worth the Extra Premium?

Standard critical illness insurance policies typically offer broader coverage such as the number of illnesses that are covered under the plan; the illnesses can range from 24-30 ailments.

The basic policies typically offer a limited number of illnesses, such as 3 to 4 ailments but potentially higher benefit amounts.

However, standard policies often come with a higher premium cost but provide a great range of covered illnesses. It all depends on individual preferences, risk tolerance, and financial circumstances. It is essential to carefully assess your needs and compare the coverage and costs of both types of policies to determine which option best suits the client’s situation.

Business owners have their own reasons to think about critical illness insurance – find out more about critical illness insurance policies for business owners here.

At LSM Insurance, we specialize in helping you find the right critical illness insurance policy to suit your unique needs. Our team excels at tailoring solutions that provide peace of mind and financial security during challenging times. We partner with more insurance providers than most other brokers, ensuring that you receive the best possible options and coverage. Don’t leave your health and financial well-being to chance—complete a quote with us today to discover how we can help protect you and your loved ones.