Critical illness insurance can provide a financial safety net

Almost $33,000. That's the lifetime average amount a cancer patient can expect to pay out of pocket, according to a new study released by the Canadian Cancer Society.¹ The research says that while 80% of cancer costs are covered by the Canadian healthcare system, the remaining 20%—which can range from lab fees and medications to gas money and lost income—fall on the patients, their families, and caregivers. These costs, the study projects, will rise an estimated 23% over the next 10 years.

The news is not all grim. There are steps you can take—both health wise and financially—to help improve your risks. For example, the Canadian Cancer Society estimates that about 4 in 10 cancer cases can be prevented through making healthy lifestyle choices and implementing policies that protect Canadians’ health.² And in terms of protecting your wealth, products like critical illness insurance can help you cope financially.

What is critical illness insurance?

Critical illness insurance is designed to offer a financial safety net. It pays a tax-free, lump sum upon a medical diagnosis of covered conditions including some types of cancer, heart attack, stroke, and other serious conditions. It’s meant to help offset the costs associated with the illness. It can cover medical expenses not included in your provincial health care plan, home care expenses, childcare, or any other need you may have.

Key advantages of critical illness insurance

• Lump sum payment: You receive a one-time cash payment upon diagnosis of a covered condition. The payment, or benefit, is tax free and you can use it to cover such costs as:
  • Home care expenses (such as a nurse, personal support worker, or housekeeper)
  • The cost of a private clinic, or getting out-of-province, or even out-of-country, care
  • Special medical equipment (such as a wheelchair)
  • A home renovation or vehicle conversion for accessibility needs
  • Travel for medical appointments or treatments
  • Childcare expenses

• Survival period: Unlike life insurance, critical illness insurance is designed to provide a living benefit, and to pay you while you are alive. Once a covered medical diagnosis is made, you may need to survive a set amount of time, generally 30 days, to receive the payment. The survival period is necessary to demonstrate the financial need for the product once you are diagnosed with a covered condition.

• Covered conditions: Critical illness insurance covers specific, defined medical conditions, usually severe and life-threatening. The most common conditions include life-threatening cancers, heart attack, and stroke, but the insurance can also cover serious conditions like blindness, deafness, dementia, kidney failure, MS, Parkinson’s disease and loss of limbs. As an example, read the full list of conditions covered by BMO Insurance critical illness living benefit policies.

• Early discovery benefits: Some critical illness insurance policies also offer an early discovery benefit, which pays a partial benefit when a life-threatening condition is detected in its early stages. The payout in most cases does not affect future benefits available under the policy. Read more about early discovery benefits.

• And more: Some policies can offer you a return of premium option. This means the money you pay for the coverage will be returned if you die before you can receive the benefit, surrender the policy, or if the policy expires without any covered condition benefit payout. Others can offer additional benefits like services that provide you and/or family members with access to medical experts for advice and support. With Living Benefit Plans from BMO Insurance you will have access to the BMO Insurance Health Advocate Plan, an industry leading, comprehensive assistance services– at no additional cost.³

Critical illness insurance vs. life insurance, vs. disability insurance: What’s the difference?

With such a wide range of types of insurance available, it can be easy to confuse the benefits each delivers. Here’s a high-level overview to help differentiate the categories.

Money matters: How much critical illness insurance do you need?

The amount of coverage you need can depend on factors like your lifestyle, your ongoing financial commitments, and the expenses due to the type of condition you are diagnosed with.

The BMO Insurance critical illness calculator can help estimate the costs.  The best way to determine your needs is to speak with a financial advisor or insurance professional who can help tailor a plan to your specific situation. By understanding your financial picture and needs, and the benefits of the type of insurance you select, you can make an informed decision that works for you. 

¹ Source: Canadian Cancer Statistics: A 2024 special report.

² Source: Canadian Cancer Society, reduce your risk.

³ BMO Insurance offers the services on a referral basis only and will not charge you for the services provided. TELUS Health (Canada) Ltd. and Teladoc Health, Inc will not charge you for the services they provide. You may however, incur additional costs for services or for providers that may be referred to you by TELUS Health (Canada) Ltd. or Teladoc Health, Inc. These additional charges are incurred at your sole discretion and BMO Insurance will not be liable for their payment.

Disclaimer: 

These comments are general in nature and should not be construed to be legal or tax advice, as each client‘s situation is different. Please consult your own legal and tax advisor.  

Please consult the appropriate policy contract for details on the terms, conditions, benefits, guarantees, exclusions, and limitations. The actual policy issued governs. Each policyholder’s financial circumstances are unique, and they must obtain and rely upon independent tax, accounting, legal and other advice concerning the structure of their insurance, as they deem appropriate for their particular circumstances. BMO Life Assurance Company does not provide any such advice to the policyholder or to the insurance advisor. 1051E