Werner C. Duever

Financial Security Advisor
Investment Representative
Freedom 55 Financial

The day I discovered critical illness insurance

In 2008, when I started working as a financial security advisor and investment representative at Freedom 55 Financial in London, Ontario, I discovered the importance of owning individual critical illness insurance. It took a few years for me to really learn about the importance of having the coverage before an illness occurs. Even with my limited personal experience with critical illnesses – few of my friends and family had suffered with one – after my training I was determined to have my own policy. It’s like putting a safety net in place if you should fall ill unexpectedly.

Critical illness insurance could give you a tax-free lump sum payment after a 30-day survival period if you have a major critical illness – such as a heart attack, stroke or life-threatening cancer. If you add on the critical condition plus rider, it could cover 22 more illnesses – such as blindness or loss of a limb. There’s even a long-term care provision included with the critical condition plus option: If you can’t perform two of the listed daily living activities – such as bathing, dressing, toileting, bladder and bowel continence, feeding or transferring in and out of bed – then you could get a tax-free lump-sum payment which you could use to update your home, hire a caregiver, etc.

Once you receive the money you can use it as you wish. For some, it could be the difference between recovering quickly and having a longer recovery period because you may not be able to afford to take a year off work. This happened to a fellow financial advisor I know personally – because he had critical illness coverage in place before he contracted cancer, he was able to purchase the right cancer medication and was back to work within a year. This happened more than five years ago and he still comes into work – we enjoy seeing him and listening to his jokes. He always has a smile on his face.

The good news is that, because of our medical system and the knowledge we have, more and more people are recovering from critical illnesses. In Canada, 63 per cent of people diagnosed with cancer will survive*, while almost 77 percent of those who have a heart attack survive and about 72 percent survive a stroke.**

The bad news is that more and more people are developing cancer in Canada. Over a lifetime, one in 2.2 men and one in 2.5 women will develop cancer.* Every year there are 70,000 heart attacks in Canada and more than 50,000 strokes.** In most cases, a critical illness hits when someone least expects it – adding to the stress and financial burden they must bear. Often, people have to declare bankruptcy because they don't have enough savings in place to help with the costs of recovery. For those who decide to use their RRSPs, this can railroad their retirement plans and significantly hurt their future financial well-being.

Why add financial worries to the list? For a small premium, you could put that risk on the shoulders of an insurance company and potentially reduce the financial stress in your life. If you add the return on premium rider, you can get your premiums back if you don’t make a claim before age 65.

Having a critical illness represents a very stressful time in a person’s life. That’s why I have my own coverage to lessen the potential financial burden. My wife decided to get a critical illness policy with Great-West Life that has a return on premium option – that way, if she doesn’t become sick, she can get her premiums returned to her. This feature helped me convince her to get the coverage.

Recently, my wife and I have seen an improvement in our earnings and decided to add more coverage. We both applied for decreasing coverage critical illness insurance with Great-West Life. It’s a more economical option for us now than the level coverage and still provides adequate protection until I have the ability to collect CPP or OAS. In the future, as our wealth increases, I plan on upgrading our coverage. You see, if you add on the critical condition plus rider to the critical illness coverage, it acts as long-term care insurance. If we add on the return on premium rider as well, we can use the premiums to help with our retirement years if we remain healthy and don’t use the coverage.

So, now it’s your turn. Will you take a gamble on your finances and risk getting a critical illness without enough financial help to help you recover? Or will you apply for your own critical illness coverage?

For a small premium, in most cases you can know that if you get sick you will be able to take care of yourself and have less risk of going bankrupt or losing your retirement savings. And if you add on the return on premium option, you can get your premiums back if you don’t make a claim. I think this is a pretty good deal, don't you?

Since starting my financial career, I've heard of numerous cases where people became sick with cancer or had a heart attack and the first thing that crossed my mind was, “Did they have critical illness insurance in place before this happened?” Let's hope you do. I've decided not to gamble with my future and put the coverage in place before I require it – it's a good feeling knowing that the coverage is there if I need it.

Just a note – to safeguard your family’s lifestyle, consider applying for your own disability insurance coverage to protect your income if you’re unable to work due to a disability. Critical illness insurance works in conjunction with disability insurance to provide complete protection should you become ill or disabled. To determine the amount of coverage that’s right for you, consult with a qualified financial security advisor licensed to provide insurance in Ontario.


*Source: Canadian Cancer Society’s Advisory Committee on Cancer Statistics. Canadian Cancer Statistics 2014. Toronto, ON: Canadian Cancer Society, 2014.

**Source: Heart and Stroke Foundation - "Getting to the Heart of the Matter" – 2015 report on the health of Canadians