Authored by: Securian Canada

Securian Canada, a leading insurance provider of innovative, life-ready insurance solutions in Canada, has teamed up with the Canadian Automobile Association (CAA). Through this new collaboration, CAA introduces an innovative suite of insurance products and a digital-first customer experience to their more than seven million Members across the country. Beginning January 1st, 2024, CAA customers have access to a streamlined portfolio of life and health & dental insurance products, available at preferred prices for Members and delivered through a convenient and user-friendly digital platform. CAA Term Life, Health & Dental and Critical Illness products are underwritten by Canadian Premier Life Insurance Company (Securian Canada).

It can sometimes feel like tempting fate to even think about insurance, let alone purchase it. But the reality is that critical illness insurance is one of the best ways to financially protect yourself—and your family.

Not only does insurance protect you against the unexpected, but it can help put your mind at ease knowing that you're financially prepared. Critical illness insurance is important to have, and best of all, doesn't take that long to sort out.

So instead of avoiding the topic, let's start tackling critical illness insurance headfirst.

What is considered a critical illness?

Critical illnesses typically refer to severe health conditions that are life-threatening or life-altering. They can often be longer-term illnesses and may have serious impacts on the lives of those affected. For example, cancer, heart attacks, strokes, or even mobility loss are often considered critical illnesses.

While most of us are aligned on what's considered a critical illness, when it comes to insurance, the specific conditions that are covered will depend on the terms of your policy.

What is critical illness insurance?

Critical illness insurance can provide you with a lump-sum benefit if you're ever diagnosed with a covered severe health condition, subject to the terms of the policy. This payment is often referred to as the living benefit, and the goal is to provide you with financial support for anything that might come because of your diagnoses.

By purchasing critical illness coverage, you're providing you and your loved ones with a financial safety net just in case anything happens to you.

10 factors to consider when choosing your critical illness insurance policy

1. Do you currently have any health conditions?

Critical illness insurance is closely tied to your health and wellness.

Health-related factors that might make you want to consider critical illness insurance include:

• If you have a family history of serious illness.
• You're older and more susceptible to severe illnesses.
• You work in a high-stress or high-risk environment.

It's often beneficial to secure coverage sooner rather than later.

Remember: Don't lie about your health conditions in your insurance application. This can result in your coverage being terminated.

2. What is your personal situation?

• Do you have any financial dependents?
• Are you the primary financial contributor in the household? Do your financial contributions impact your living expenses?
• Are there any responsibilities, such as childcare, that would need to be outsourced if you were to experience a serious medical emergency?
• Do you live somewhere where you'll need to travel to get major medical care?
• Do you have limited health insurance outside of provincial healthcare?

If the answer is yes to any of the above, there's a good chance critical illness insurance could be a good fit for you.

3. What is your financial situation? Do you have a budget in mind?

A huge consideration around critical illness insurance is your current financial situation. The biggest reason individuals get critical illness coverage is to provide themselves with a financial safety net.

Your financial situation will determine if you need critical illness insurance or how much coverage you should have.

If you have a large emergency fund with several months' worth of expenses or don't have financial dependents, you might choose to forgo critical illness insurance. Or you may be able to opt for a lower coverage amount.

4. How much does critical illness insurance pay?

If you're diagnosed with a covered condition, your insurance can pay you a living benefit. The size of this payout can vary drastically and depends on the terms of your individual policy.

When you buy your critical illness insurance, you'll get to choose exactly how much you want to be insured for. This number will depend on your personal circumstances, current financial situation, and your budget.

5. How much critical illness insurance coverage do you need?

Everyone's insurance coverage needs are different. While there's no set formula for calculating the perfect amount of coverage, there are some strategies that can help guide you in the right direction.

A good starting point is enough to cover six months of income.

To get an estimate of how much critical illness insurance you might need, you'll want to add up the following expenses:

• The cost of replacing your income for at least several months.
• How much you'd need to cover your living expenses and debt repayments.
• If you have any financial dependents.
• What illness-related expenses you might face, such as travel, medical equipment, or accessibility accommodations.

If you have savings or investments, you can opt to subtract those from your total estimate to reduce the amount of coverage you need.

6. What is covered by the critical illness insurance policy?

Every critical illness insurance policy has different coverage, even the list of illnesses that are covered can vary significantly between different policies.

CAA Critical Illness Insurance covers as many as 44 conditions, 27 of which are early-stage critical illnesses. When choosing your policy, you should carefully review the list of conditions to make sure they fit your needs.

The last thing you want is to find out that you aren't covered for a condition you were expecting to be insured for.

With that in mind, the number of covered conditions can also have an impact on your premiums. Typically, the more conditions that are covered, the higher your insurance rates. That's why many insurers also offer a range of coverage tiers that cover different conditions. If you're on a budget, it can be a great way to still get some level of coverage without breaking the bank.

Of course, having limited coverage can leave you vulnerable if you experience a non-covered condition.

7. What is not covered by the critical illness insurance policy?

As a general rule, if it's not listed in your policy, it's probably not covered.

• Critical illnesses that aren't included in your policy: For example, neurological conditions are typically considered critical illnesses, but if they aren't listed as a covered condition in the terms of your policy, you won't be eligible to file a claim or receive a payout.
• Non-critical illnesses: Some medical conditions can be serious but may not fall under the critical illness category. For example, diabetes or pregnancy complications can be life-threatening, but most critical illness policies don't cover them. Some other forms of insurance, such as disability insurance may cover these types of conditions if they impact your ability to work.
• Pre-existing conditions: Many critical illness policies won't pay a benefit for conditions or illnesses that stem from a pre-existing condition.
• Death: If you pass away immediately or soon after a critical illness diagnosis, you may not be eligible to claim your living benefit. This is where life insurance would kick in.
• Early-stage coverage: Some early-stage conditions are only partially covered. So, while you may receive a payout, you may not receive the full insured amount.

There are many exclusions that are policy-specific, so make sure to review the ones that are outlined in your critical illness insurance.

8. Is there a waiting period or survival period clause for the critical illness insurance policy?

For critical illness insurance, a survival period clause or waiting period indicates how long you need to wait before you can submit a claim for a covered condition.

For example, with CAA Critical Illness insurance, there's no waiting period for 25 of the 44 covered conditions. But with cardiac conditions, there's a 30-day waiting period. Having short or no waiting periods means you're able to submit a claim right away and get financial relief faster.

9. How simple is the application process?

Unfortunately, when it comes to insurance, the process of applying for and securing coverage can be as stressful and unnecessarily complicated. But here's the thing—it really doesn't have to be.

CAA Critical Illness Insurance, provided by Securian Canada, have a simple and efficient application process. This means you can get a quote and apply online in less than 20 minutes. Plus, you'll also find out instantly if you're approved.

Not only does this mean you can secure coverage faster, but it's easier for you to compare quotes and find the policy that's the right fit for you.

CAA Critical Illness Insurance also makes it possible to apply for term life insurance coverage in the same application, so you can cover all your financial bases in just a few clicks.

10. Is critical illness insurance worth it for you?

For most Canadians, critical illness insurance is worth the investment. Not only does it provide you and your family with financial security, but it also helps put your mind at ease throughout the entire term. It allows you to live comfortably without that dark medical emergency cloud over your head.

Get comprehensive critical illness insurance in Canada. Discover how CAA Critical Illness Insurance can help you stay prepared for the unexpected. Find the coverage that suits your budget and save 10% on critical illness insurance rates as a CAA Member. Learn more today.