Insurance is essential. As you grow older you realize that you have dependents who rely on you financially. If something were to happen to you what would happen to them? To safeguard against such unforeseen tragedies considering life insurance and or critical illness insurance is certainly worth it.
No one can predict the future. We don’t even know what’s going to happen in the next second let alone months or years down the line. All we can do is plan and prepare for the worst and hope things turn out for the best. The best way to do that without resorting to extreme measures is to insure yourself against any unforeseen future calamity.
However, what type of insurance policy should you invest in? Is life insurance a better option or should you opt for critical illness? What is the difference between the two? Well, for the answers to these questions and much more you have certainly landed at the right place.
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The Difference Between Life Insurance & Critical Illness
What is life insurance?
In layman’s terms, a life insurance policy is a contract with an insurance company that guarantees a set sum of payment to the insurer’s beneficiaries in case the person who is insured passes away. The insured has to in return pay premiums on a monthly, quarterly, or annual basis depending on the contract agreements.
What Is Critical Illness Insurance?
Sometimes referred to as Catastrophic Illness Insurance, this form of insurance policy is less heard of by the general public. Critical Illness insurance is a new type of insurance policy that safeguards against devastating critical illnesses, such as cancer, heart attack, and strokes to name but a few.
Having critical illness insurance can be the difference between having all your medical and post-treatment bills taken care of, and you facing financial ruin; paying for expensive medications and treatments that aren’t part of your medical plan.
Many people living in Canada assume that they are fully protected against any medical expenses with a standard health insurance plan or group benefits. However, they couldn’t be more wrong.
The enormous costs associated with treating life-threatening illnesses can far exceed the amounts your health plan can cover. The rest of the costs have to come out of pocket which can hurt your personal finances as well as impact your family’s financial well-being.
Critical illness insurance policies pay out a tax-free lump sum of cash in case the insured is diagnosed with a life-threatening illness such as cancer, stroke, coronary bypass, etc & survives the 30-day waiting period. The cash is important to help pay for overruns where your standard health plan falls short.
The additional funds can also be instrumental in helping you get the best care and treatment possible for a quick and speedy recovery.
Differences Between The Two?
Both insurance policies are vital as death and illness can occur at any time. At the same time, both insurance policies couldn’t be more different. Life insurance protects against untimely death and pays out only after the insured person is deceased.
Whereas, critical illness insurance pays out while the person is still alive but diagnosed with a life-threatening illness. The payout is to pay for current and ongoing medical expenses and the cash is strictly for the treatment of the insured not their beneficiaries.
What Illnesses & Emergencies Are Covered Under Critical Illness?
The following are the most common type of life-threatening illnesses covered under critical illness insurance policies in Canada:
- Organ Transplant
- Heart Attack
- Coronary Bypass
However, each provider can offer different illness coverage so always read the fine print before opting for any policy. Different insurance providers have different exceptions to coverage. Some types of cancer treatments, for example, may not be covered.
Oftentimes chronic illnesses aren’t covered either and policies can have certain terms and conditions for the payout to be applicable. Always read any insurance policy carefully and if you don’t like something don’t agree or sign anything unless you are 100% satisfied with the policy at hand.
The Benefits Of Life Insurance & Critical Illness
Having any type of insurance whether it be car insurance, home insurance, health insurance, or any other type of insurance policy will likely come with some sort of benefits that can come in handy in the near future.
Life insurance for example offers many benefits in case you are met with an untimely demise. Depending on your policy your beneficiaries will be entitled to receive a fair sum of money that can help them pay for your funeral expenses, mortgage payments, and much more.
Life Insurance policies with large coverage amounts can even cover your family for years to come and can help them pay off any outstanding loans, credit cards, and more. With the right life insurance policy, your loved ones will be looked after even long after you have passed. Having that peace of mind is what most of us want. Is it not?
In the same way, critical illness insurance offers plenty of benefits in case the insured is faced with a life-threatening medical emergency or illness. First and foremost, this type of policy is generally quite affordable and can pay for critical medical services or specialized treatments that may not be part of your standard health insurance plan.
The other great benefit of critical illness insurance is that the money received can be spent on a wide variety of things and is not just limited to medical expenses. The funds can be used for daily living expenses, transportation expenses, or even taking a vacation with family and friends in cases of terminal illnesses.
Critical illness coverage can also be added to certain life insurance policies as a rider. This can prove to be even more beneficial and cost-effective and is certainly an option one should consider if they already own a life insurance policy.
Finding The Right Insurance Policy For You
If you are seeking an insurance provider that has your best interests at heart and seeks to provide the best advice regarding most types of insurance policies, pick up the phone and get in touch with McIver Insurance.
Based out of Halifax, NS, we are a company dedicated to providing the best coverage policies at the lowest possible rates to Canadians everywhere. Meet with our team today and start building a safer, more secure tomorrow!