Given recent advancements in medicine, it's not surprising that people are increasingly surviving serious health issues. Statistics are positive. For instance, the immediate death rate from heart attack has decreased by 51% since 1968. Although 50,000 Canadians suffer a stroke each year, 75% of these individuals are expected to survive the initial event. And half of all people diagnosed with common cancers will survive the next five years or more.

While this is definitely good news, it also opens the door to a new problem: surviving the illness financially. 

Ask yourself: if you were to be diagnosed with a serious illness tomorrow, would you be able to pay your bills? Not just medical expenses, but your mortgage payment, your utilities, your car loan, or any other bills you may have? If not, critical illness insurance may be the answer for you.
 

What is critical illness insurance?

Critical illness insurance is a living benefit, paid to you, the policy owner, in the event that you develop any one of the covered illnesses, diseases, or conditions. While the exact coverage options will vary according to policy, common illnesses covered by critical illness insurance include cancer, Multiple Sclerosis, stroke, Parkinson's, Alzheimer's, heart attack and kidney failure.

Individuals between the ages of 18 and 65 are eligible for this type of insurance. If you are diagnosed with any one of the covered illnesses, a lump sum benefit will be paid to you 30 days after your initial diagnosis. Benefit options start at $25,000 and reach $1 million for personal coverage and $2 million for business coverage. A variety of other options (an allowance for inflation, for example) is available to create a customized plan that's suited to your individual needs.
 

The benefits of critical illness insurance

The main benefit of critical illness insurance is peace of mind. Should you contract a serious illness, you will need all your strength to recover. Obviously, this is easier to do if you don't have to worry about how you're going to cover your monthly bills when you're off work.

Another obvious benefit is flexibility. The funds provided from a critical illness plan may be used to pay medical bills, the cost of ongoing therapy, moving costs, as well as other expenses such as your mortgage payments, car payments or child care. The choice is yours.

Critical illness insurance can be an essential component of a sound financial plan. But it's not something that you should purchase without a thorough review of your financial situation. If you're interested in investigating what critical illness insurance is right for you, call your financial advisor. He or she will be happy to review the pros and cons of several policies with you and select the one that's right for your needs.