It’s called a living benefit because you do not need to pass away to make a claim.
In most cases, the insured is also the beneficiary (unless your company if covering the risk of a Key Person or Shareholder’s Critical Illness) so you can receive a tax-free lump sum of money that defrays your temporary loss of income, medical treatments, need for respite or specialty care, and more.
The nice thing about the critical illness benefit is that you can use it in any way you wish.
Of course, it would be wonderful if all Canadians stayed healthy for the duration of their lifespan, but the reality is not that rosy. Most Canadians will develop a very serious illness before they turn 65.
In fact, one in three will develop some form of cancer.
With such high risks that you may be sidelined for several months, incur serious expenses and have your income interrupted while you focus on recovery.
It makes good financial sense to mitigate this risk with critical illness insurance.
Non medical critical illness insurance policies are designed to provide coverage to individuals with pre-existing health conditions. There are two levels of no medical coverage: simplified issue and guaranteed issue. For the purpose of this blog, we will focus on simplified issue critical illness insurance.
Can I get Critical Illness Insurance if I am Already Ill?
To get simplified issue critical illness insurance, you do not need to have a medical exam. In fact, it is that medical exam that gets most people in poor health a rating or denial on their application.
You do have to answer a series of questions, roughly 3 to 10 of them depending on the policy. Your answers determine your eligibly for coverage – if you can answer no to the question list you qualify.
So, yes – you can actually apply for a critical illness life insurance policy if you have a pre-existing condition and you’ll know right away if you qualify for coverage.
Other Reasons to Apply for a Simple Issue Critical Illness Policy
Some people simply don’t like doctors and avoid them at all costs. Those people are a great fit for simplified issue insurance since they can just answer a few questions and skip the medical exam.
Other people are in a hurry – a looming trip, a tightly packed schedule – and don’t want to take the time to fill out a full application and plan a time for a nurse to visit. Since simplified issue insurance is faster and easier to get than traditionally underwritten policies, this is a good fit for such individuals as well.
Any Drawbacks to Simple Issue Critical Illness Insurance?
Simplified issue critical illness insurance has lower benefit amounts than traditionally underwritten insurance, but the coverage caps are still generous. Most simple issue carriers cap coverage in the $100,000 to $150,000 range.
Generally, simple issue policies come with a 24-month pre-existing condition clause and a 24 month contestability clause from the policy date.
How to get Simple Issue Critical Illness Insurance
A broker is your best bet for this type of life insurance. Brokers do not represent just one company; they represent all the carriers in Canada.
Since critical illness policies vary widely in their scope, what they cover, and their return of premium policies, it is best to work with a broker that knows the ins and outs of each policy so they can match you with the one that best suits your needs.
Simplified issue critical illness insurance can provide financial peace of mind.
Contact us today to learn more.