Life is full of uncertainties, and you never know when it will be turned upside down. Critical illnesses such as cancer, heart attacks and strokes can not only be life-threatening, but they can severely impact you financially. That’s where critical illness insurance can come into play. It allows you to focus on your recovery without needing to worry about your finances. Here we’ll look at the critical illness insurance benefits and whether or not critical illness insurance in Ontario is right for you.
What is Critical Illness Insurance?
Critical illness insurance is a type of coverage that will provide you will a lump-sum payment should the conditions of the coverage be met. These are usually serious medical conditions which are specified in your policy.
This is much different from health insurance. With this coverage, you don’t get specific financial support for medical expenses. Instead, you’ll be given a lump sum to support yourself financially in any way that you see fit.
The specific conditions covered will vary as there are different critical illness policy options. Some prefer to have coverage for a wide range of conditions, whereas others prefer more specific coverage. This is often to protect themselves from something they are genetically vulnerable to.
Due to this, it’s vital to carefully review your policy and know exactly what you are covered for and what you aren’t.
How Does It Work?
When you buy a critical illness insurance policy, you’ll pay a regular premium to the insurance company. If you are then diagnosed will and illness specified in the cover, then you’ll be given a lump-sum payment.
They will pay you the amount agreed in your policy, and this is not dependent on your medical expenses. If you are diagnosed with a condition that isn’t specified in your policy then you won’t receive any payment.
Importance of Critical Illness Insurance
Why is it a good idea to get financial protection for serious illnesses? Well, there are many things you can use the money for depending on your financial needs. Let’s take a look at the benefits of critical illness insurance for residents of Ontario.
Medical Expenses – While not specifically for medical expenses, this can be a great use of your critical illness cover. This will allow you to pay for any relevant medical costs and even look into getting private medical care.
Debt Repayment – A payout can be used to pay off the likes of mortgages, loans, and credit cards. This will help to reduce financial stress, especially if your critical illness means you’re no longer able to earn an income.
Income Replacement – Of course, if you have lost your income, then you may need to payout for day-to-day living costs. This can work as a replacement for your lost earnings until you can either return to work or your financial situation changes.
Home Modifications – If you have a life-changing illness, such as a stroke, you may need modifications to your home to make it more livable. Installing the likes of handrails and stairlifts can make your life a lot easier.
Specialized Care – In some cases you may need specialized care either in your home or in a care facility. The payment can be used for this care which may otherwise have put you in debt.
Who Needs Critical Illness Insurance?
Is critical insurance right for you? While everyone can benefit from the peace of mind that critical illness insurance can bring, there are some individuals for who it makes a lot of sense.
No Savings – Not having savings to fall back on makes you more susceptible to a loss of income. If a critical illness would immediately put you in financial distress, insurance can be your safety net.
Parents and Caregivers – Just as with life insurance, critical illness insurance becomes important for those with dependents.
Self-Employed – Those who are self-employed won’t get the benefits and sick leave that employed people can often enjoy. Critical illness cover can give you that financial cushion that self-employed people are vulnerable to.
High Risk Occupations – For those with a high risk occupation, both life insurance and critical illness cover can be important.
Family History – If you have a family history of a specific critical illness, there’s a good chance you’ll be at a higher risk of it. Being prepared for this possibility is a prudent move.
Critical Illness Insurance vs. Life Insurance
By now you may be wondering if you should get critical illness insurance, life insurance or both. If you’re on the fence, then it’s important to know the difference between the two.
Critical Illness Insurance – This is designed to give you immediate financial protection. For example, if you’re diagnosed with terminal cancer and don’t have this cover then you may suffer with financial loss without any help. This can be especially important for those who don’t have savings/assets, or face high health risks.
Life Insurance – This is designed for long-term protection for your loved ones, giving them financial support in your absence. If you die suddenly, your family will have a financial safety net. However, this only pays out on death, and not before.
Should You Have One or Both?
If you have the budget, then it makes a lot of sense to get both. If you have to make a choice, then this can depend on your circumstances and priorities.
If you’re at high-risk of a genetic condition and have no savings, critical illness cover can make more sense. If you have a high-risk occupation and have a large mortgage, life insurance may be a better choice.
Without knowing your circumstances, it can be very difficult to advise on which is the better option. It’s a great idea to consult with a financial advisor who can give you bespoke guidance.
Final Thoughts
Critical illness cover can be a crucial financial tool to protect you and your family from future challenges. It can be especially important if a loss of your income would have serious consequences for your finances.
Whether or not it’s the correct insurance for you depends on a wide range of factors. If you’re interested in critical illness insurance cover then contact Buckler Insurance today. We’ll happily assess your circumstances and see how we can help.
