You run your own business and have no group benefits or sick pay.
Why it fits: A lump sum can keep your business and household running while you focus on getting better.
Critical Illness Insurance
A tax-free lump sum to help you recover from a serious illness.
Critical illness insurance pays a tax-free lump sum if you are diagnosed with a covered condition, such as cancer, heart attack or stroke, and survive a short waiting period. You can use the money however you need.
Overview
Critical illness insurance pays you a tax-free lump sum if you are diagnosed with a serious condition covered by your policy, such as cancer, a heart attack or a stroke. The money is yours to use however you need while you recover.
More Canadians now survive serious illnesses than ever before. That is good news, but recovery can take months, and the costs of lost income, travel and extra care add up quickly.
When critical illness insurance makes the most sense
Critical illness coverage is valuable for anyone who would struggle financially if they had to stop working for a while. It is especially helpful for the self-employed, people without group benefits and families who rely on two incomes. It works well alongside life and disability insurance to round out your plan.
Choosing a policy
When comparing critical illness policies, look beyond the price:
- Covered conditions: how many illnesses are covered, and how does the policy define them?
- Partial benefits and riders: look for early detection payouts and return of premium options.
- Insurer strength: we compare plans from Canada’s leading insurers to find the right fit and price for you.
How it works
- 1
Choose your amount and coverage length
Pick a lump sum amount and how long you want coverage, such as 10 years, until age 75 or for life.
- 2
Pay your premium
Your premium is based on your age, health and the plan you choose. Many plans offer level premiums for the length of the term.
- 3
Get diagnosed and survive the waiting period
If you are diagnosed with a covered illness and survive the survival period, usually 30 days, you can make a claim.
- 4
Receive a lump sum
The insurer pays the full benefit in one tax-free payment. There are no rules on how you spend it.
Key benefits
Tax-free lump sum
When you pay the premiums personally, the benefit is generally received tax-free in Canada.
Use the money your way
Pay the mortgage, cover lost income, fund private treatment, hire help at home or simply take time to heal.
Covers major illnesses
Plans typically cover cancer, heart attack and stroke, and many cover 20 or more conditions in total.
Early detection benefits
Many plans pay a smaller partial benefit for early-stage conditions, such as some early cancers, without reducing your main benefit.
Return of premium options
Optional riders can refund some or all of your premiums if you never claim or cancel the policy after a set number of years.
Support services
Many insurers include access to medical second opinions and care navigation to help you through treatment.
Who it’s for
You and your partner both work and need two incomes to cover the bills.
Why it fits: A critical illness payout can cover the mortgage and costs so one partner can take time off to recover or provide care.
Several family members have had cancer or heart disease.
Why it fits: Getting coverage while you are healthy locks in protection before any health issues show up.
Pros & cons
Pros
- Tax-free lump sum when premiums are paid personally
- No restrictions on how you use the money
- Covers the illnesses Canadians face most often
- Return of premium riders are available
Things to consider
- Only pays for conditions listed in the policy
- Survival period and exclusions apply
- Can cost more than term life for the same amount
How it compares
| Critical illness compared with disability and life insurance | Critical Illness | Disability | Life Insurance |
|---|---|---|---|
| What triggers a payout | Diagnosis of a covered illness | Being unable to work due to illness or injury | Death |
| How it pays | One lump sum | Monthly income | One lump sum |
| Who receives it | You | You | Your beneficiaries |
| Main purpose | Cover costs during recovery | Replace lost income | Protect your family after you are gone |
Run the numbers
Critical illness coverageEstimate the lump sum you would need to recover from a serious illness without financial stress.Frequently asked questions
Which illnesses are covered?
Most plans cover cancer, heart attack and stroke, and many cover a longer list, such as kidney failure, multiple sclerosis and major organ transplant. Each policy defines its covered conditions, so it is important to read the details.
What is the survival period?
It is the time you must live after diagnosis before the benefit is paid, usually 30 days. If you pass away during that time, some plans refund your premiums instead.
How does a return of premium rider work?
For an extra cost, the rider can refund some or all of the premiums you paid if you never make a claim and keep the policy for a set time, or when the policy ends.
Do I need critical illness insurance if I have a provincial health plan?
Provincial plans cover many medical costs, but not lost income, travel for treatment, home care or some drugs. Critical illness insurance helps fill those gaps.
Related products
Disability Insurance
Protect your income if illness or injury keeps you from working.
Term Life Insurance
Affordable protection for the years your family depends on you most.
Long-Term Care Insurance
Help paying for care when everyday tasks become hard, so your savings and family are not stretched thin.
Get the best rate on Critical Illness Insurance
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