Critical Illness Insurance: Too often forgotten and underestimated in the industry

This article was generously provided by Véronique Caty, Business Development Consultant, Financial Horizons Group, Quebec Region.


When we think of insurance, what often comes to mind is life insurance, in the event of death. People want their estate and their loved ones to be well looked after in spite of their death or they want to replace a source of income that is no longer there.


On the other hand, people often forget that in the event of a critical illness, it is they along with their families who will be caught off guard during their lifetime. Many people believe there’s nothing to worry about because they’re in good health or don’t think their children will have any physical ailments. They don’t realize that critical illnesses strike healthy people as well and that purchasing such a policy precisely when they’re in good health is an excellent because not everyone is eligible to such coverage!


What is meant by critical illness?

A critical illness is an extreme and unexpected medical condition. It’s a very difficult time because one’s life is at stake. We’re lucky nowadays because the survival rate is much higher than it used to be and yet, despite encouraging indicators, a critical illness remains a stressful life event, one that in certain cases can lead to death. It’s also essential to point out that such an illness has an impact on the physical as well as the psychological and financial health of the whole family, a point that is all too often underestimated or misunderstood.


What are the uses of critical illness insurance?

Critical illness insurance covers various types of expenses and costs that aren’t covered by disability insurance. The recovery and treatment period following a critical illness can lead to non-budgeted expenses that can add up to significant amounts. For example.

  • Covering time off work for a person (e.g., a child’s parent or a spouse) who wishes to be close by to offer support to the critically ill person;
  • Hiring a nanny/cook/cleaning person to prepare meals for the family and help look after the children;
  • Travelling abroad for special treatments, which are often expensive or not available in a timely manner;
  • Adapting the home to the new critical illness requirements and purchasing medical equipment;
  • Paying for travel costs! People living in more remote areas all too often forget to consider the travel costs associated with getting to treatment centres and the housing costs that may be required. Even if you live close to the hospital, the cost of gas and parking can add up quickly;
  • Absorbing the financial losses resulting from the absence of a person with a critical illness, if he or she is a key person in the organization, as well as the financial resources needed to find and train a replacement;
  • Redeeming the shares of a sick partner.


Critical illness insurance has the added advantage of providing a tax-free lump sum benefit that the client is free to spend as they see fit.

In addition, most critical illness policies provide free access to options, such as Best Doctors or similar, which allows patients to seek a second medical opinion on the diagnosis and possible treatments. Just think of the peace of mind these additional services can provide patients!  

There are several types of critical illness products, both temporary and permanent. At a minimum, only cancer is covered, but coverage can include up to 25 critical illnesses.

There’s also the option of adding a return of premium rider. What this means is that if no claim was submitted and the policy was terminated after the prescribed period, the policyholder would be able to recover the premium they had previously paid up to a certain percentage, all the while having benefited from coverage in the event of critical illness. As a result, this type of rider can provide a most welcome in-flow of money at retirement if no diagnosis has been made to date.


You are responsible, as part of your customer needs analysis, to make your clients aware of these types of risks and to help them dedicate a portion of their budget to these possible life situations.


Selling critical illness insurance is selling quality of life in the event of a difficult and unforeseen diagnosis. It’s the same reasoning that applies to purchasing home insurance: we do it without thinking that a fire could start in the house, but we do acknowledge that if the risk were to happen, it could have disastrous financial consequences without proper insurance!  Dare to speak to your clients about critical illness insurance because they could thank you for having saved them many worries!