What is critical illness insurance?

• Pays on diagnosis of a listed condition, not on disability or inability to work.
• A survival period, often 30 days, must be met before the benefit is payable.
• Definitions in the contract govern — not the everyday meaning of a diagnosis.
• Early-stage or less severe conditions may pay a partial benefit or nothing.
• Some policies offer a return-of-premium option at additional cost.

Provincial plans cover most medical treatment, but not lost household income, travel for treatment, home modifications, private nursing, drugs outside the formulary, or a partner taking unpaid leave. A lump sum addresses those financial gaps.

Each covered condition has a contractual definition, sometimes requiring a specific severity, duration or diagnostic finding. Two policies listing the same number of conditions can differ materially. Reviewing the definitions of the most common claims — cancer, heart attack, stroke — matters more than the headline count.

Pre-existing conditions, conditions diagnosed within a moratorium period after issue (often 90 days for certain cancers), and non-disclosure at application are frequent reasons claims are denied.

• Coverage is medically underwritten and family history can affect eligibility and price.
• Critical illness insurance is not disability insurance and does not replace ongoing income.
• Group critical illness coverage is often limited and ends with employment.

• Insurance and financial basics for consumers — Financial Consumer Agency of Canada
• Life and health insurance in Canada — industry resources — CLHIA
• Insurance regulation across Canadian provinces and territories — Canadian Council of Insurance Regulators