Disability and Critical Illness Insurance: A Comparative Overview

This article was generously provided by Marie-Josée Riffon, Business Development Consultant, Financial Horizons Group, Quebec Region.


“I don’t need a critical illness policy because I already have disability insurance!”


That’s something I hear whenever I discuss the issue of critical illness. At the surface, such a statement may seem to have some validity; however, you must move past the surface and understand that disability insurance generally covers only 70% of one’s salary and that, in the event of disability, that 70% will be used to cover basic expenses like the mortgage, groceries and monthly bills.

Critical illness insurance is meant to provide extra money to cover additional expenses related to a critical illness. It’s rare for people to feel like they have financial surpluses when they’re working – imagine what it’s like to live with a disability on a reduced salary. There will certainly be a shortfall and potentially very serious consequences for one’s finances, physical and psychological well-being, and peace of mind.


Statistics and the high likelihood of surviving a serious illness

Did you know, according to the most recent available statistics, 70,000 people have a heart attack every year1 in Canada? Did you also know that every year, there are 206,200 new cases of cancer, of which 80,800 result in death2? And that one in two Canadians will have cancer in their lifetime but only one in four will die from it2?

I could go on quoting other statistics, but what I want to highlight is that these numbers support the claim that people who suffer from a critical illness often do survive. And if the probabilities of physical survival are high, we need to consider “financial survival”. Beyond financial health, one must also properly consider both short-term and long-term health and financial security.

Put yourself in the shoes of one of your clients and ask yourself the following questions:

  • Where will I find the money if the critical illness with which I have been diagnosed forces me to extend my disability at home?
  • And what if this illness requires medical care and therefore additional costs at home?
  • What about frequent hospital visits?
  • And special medical equipment?
  • What if my spouse wishes to stop working for a while to support me or to make up for the fact that I can no longer perform all of daily duties (cleaning, grocery shopping, transporting the children, etc.)?

Disability insurance only covers 70% of your salary. Critical illness insurance becomes essential as a necessary complement to disability insurance.


As an advisor, don’t you think it would be a real shame if one of your clients who was diagnosed with a critical illness had to “dip into” their savings or investments, therefore jeopardizing, for example, the education of their children or their retirement?

Critical illness insurance is a benefit paid directly to the client in the form of a lump sum. The payment is immediate, as soon as the forms are completed by the doctor.


What about critical illness insurance coverage for children?

A critical illness diagnosis of a child is also very upsetting. I’m sure you’d agree that no parent should have to choose between staying home with their sick child and going back to work. Your client finds critical illness insurance to be too expensive? Offer them a combination product that includes life insurance or a family rider on the parent’s policy!

We have to stop thinking that critical illness diagnoses only happen to others. I suggest that you have a frank and factual discussion with your clients about the chances of surviving a critical illness and provide simple examples of some of the expenses that can be covered by critical illness insurance. And, as I don’t want to be the proverbial shoemaker that goes barefoot, I encourage you to start by insuring yourself.

  1. CPR First Aid Quebec, https://secourismercrquebec.com/
  2. Canadian Cancer Society, http://www.cancer.ca