The Guide to Critical Illness Insurance

In 1967, Dr. Marius Barnard helped perform the world’s first human-to-human heart transplant. He later went on to invent critical illness insurance, which offers protection not because people will die from an illness but, increasingly due to modern medicine, because they are likely to survive it.


Critical illness insurance provides a one-time cash payment upon diagnosis of a number of illnesses including heart attack, stroke, coronary artery bypass surgery, and life-threatening cancers. It comes in 2 different flavours: basic and comprehensive.


Basic critical illness insurance policies cover just the above mentioned 4 illnesses. Comprehensive polices cover these, plus over 20 additional illnesses people may experience.  Covered illnesses can include:

Alzheimer’s disease

Aortic surgery

Benign brain tumour




Coronary artery bypass surgery


Heart attack

Heart valve replacement or repair

Kidney failure

Loss of independence

Loss of limbs

Loss of speech

Parkinson’s disease

Major organ failure

Major organ transplant

Motor neuron disease

Multiple sclerosis

Occupational HIV


Parkinson’s disease

Severe burns


Illness Definitions are Specific

Caution should be exercised. Each policy will specifically list and define in the contract the covered illnesses. For example, it’s not enough to have experienced a heart attack for a payout from the policy to occur. You must be medically diagnosed to have experienced a heart attack and it must meet the specific definition laid out in your policy.


What is the Need?

Critical illness insurance exists to help alleviate financial burdens for those suffering from major illnesses. Potential extra costs include:

  • Loss of income
  • Loss of spousal income for time off work
  • Moving or major home renovations
  • Medical treatments not covered (e.g. outside of Canada, private clinics, drugs beyond insurance coverage)
  • Live-in caregiver


Coverage Differs from Disability Insurance

Critical illness insurance can make sense to supplement disability insurance, as one or the other policy may pay out after any given event. For example, you may suffer the loss of the use of your legs which may not keep you away from your office job but come with other major expenses. Considerable renovations may need to be done around the house or moving to a new house altogether may be required. Here, disability insurance would not pay out but critical illness insurance would.


Disability Coverage for Those Without Income

For stay at home parents, or those out of work for other reasons, disability insurance is not an option. Here, critical illness insurance can be used to provide coverage in the event of a major illness.


While suffering a stroke could take someone out of work for months to recover while receiving disability payments, someone not working could receive a payout from critical illness insurance to help cover additional life expenses, like childcare or home modifications.


Waiting Periods for Some Illnesses

Some covered illnesses require you to survive the illness for 30 days after diagnosis before a claim will be paid. For example, in the case of heart valve surgery, the patient must survive for 30 days following the surgery. In the case of a heart attack, the patient must survive 30 days following the date of diagnosis. Life insurance would independently provide coverage in circumstances where individuals do not survive the illness.




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