With the advances in medical science, we face the possibility that we will suffer a serious illness, survive the initial illness and live for many more years.

Consider these facts:

  • 1 in 3 people will develop some form of cancer during their lifetime
  • 2 in 19 women will develop breast cancer
  • 1 in 9 men will develop prostate cancer
  • 1/3rd of stroke victims are under age 65
  • 80% of heart attack victims survive

However, on the way to recovery, the financial obligations can be very challenging. Critical Illness (CI) insurance is an innovative form of coverage which pays out a tax free lump sum benefit of up to $2 million after 30 days from the initial diagnosis. There are 21 different illnesses covered through Critical Illness including heart attack, cancer or stroke.

As well, most Critical Illness plans provide access to the services of Best Doctors at no additional cost. Best Doctors is one of the world's pre-eminent independent authorities of healthcare. Having access to their services will provide personalized medical evaluations by world-class specialists renowned as experts in the diagnosed condition. Best Doctors can select and provide complete professional biographies of up to three leading specialists for the diagnosed condition either in the insured's hometown, across Canada or around the world. Best Doctors can also arrange appointments with top medical experts and hospitals in the United States. By utilizing these services the insured may qualify for significant costs discounts of up to 70%.

There are a few different options for how to cover yourself and your employees with critical illness insurance. It can be a personal plan, a company plan, or can cover specific executives.



Critical Illness - Personal

Surviving a critical illness is quite common in today's advanced medical world.

On the way to recovery however, the financial obligations can be very difficult to cope with. Critical illness insurance is a product that has been designed to cover these financial obligations with a lump sum of up to $2 million.

A lump sum benefit is paid directly to the client tax-free upon medical diagnosis of a covered critical illness and not on the inability to work. The client ultimately decides how they will use the lump sum benefit.

Many Critical Illness plans offer a form of "forced savings" option whereby the insurer will return as much as 100% of all premiums paid (less policy fees) to the insured if a claim is not made by a stated period of time in the future. This option is referred to as a Return of Premium Rider.

Although it is largely assumed that critical illness benefits are received tax-free, there is currently no specific direction in the tax act regarding the taxation of critical illness policies. The insurance industry is working on recommendations to the Ministry of Finance that would see specific language added to the tax act confirming the tax-free nature of this benefit.

Critical Illness - Corporate

Surviving a critical illness is quite common in today's advanced medical world.

Within a corporate setting the premiums are typically paid for by the company. Thus, the benefit is received by the corporation on a tax-free basis. Should the critical illness benefit then be paid to the individual, it would be subject to taxation as a dividend.

If the corporation is to use a group option, they can deduct the premium and the individual can receive the benefits tax-free. It should be noted that this policy cannot be offered exclusively to shareholders; it must be applied to a class of employees (for example, all managers).