Critical Illness sign

Critical Illness Benefits: Should you offer CI coverage to your employees?

The Birth of C.I. Insurance

While working on the first successful heart transplant in December 1967, Dr. Marius Barnard, a South African heart surgeon, observed that after surviving surgery, patients often faced serious   financial challenges.  “They didn’t lose their life, they lost their life savings”.

Dr. Barnard then became a champion for the introduction in August of 1983 of a form of insurance to help patients with the financial burden often associated with their recovery following a Critical Illness.

Today many benefits plans include C.I. benefits as gaps still exist between government funded health services, private health plans, disability insurance programs etc.

What is Critical Illness Insurance?

Simply stated, C.I. insurance provides a tax-free lump sum cash payment to an individual who is diagnosed with a covered illness and survives a 30 day period following that diagnoses.

Covered conditions vary by insurance carrier, but typically include up to 25 illnesses.  The 3 major illnesses that account for the majority of claims are Heart Attack, Cancer, and Stroke.  Additional conditions such as Multiple Sclerosis, ALS, Parkinson’s disease and Alzheimer’s are also often included in the coverage.  Some plans also include partial benefits for hip and or knee replacement.

C.I. provides cash when your employee needs it most and can be used to cover additional expenses including:

– Medical expenses not covered by existing government or private plans
– To seek treatment outside of Canada
– Home or Automobile modifications
– Paying down debts, such as mortgages, loans or credit card debt
– Replacing lost income during the employee’s recovery period
– Income to help offset a spouse’s income who takes off time to care for the employee

Why is There a Need for C.I. Insurance

Medical science continues to grow and as a result, the survival rates for illnesses continues grow as well. Consider these statistics:

3 out of 4 families will be affected by cancer and 30% of those with cancer are completely cured.

1 in 2 will contract some form of heart disease yet 95% of heart attack victims survive a first attack.

1 in 20 people run the risk of having a stroke before age 70 but again 75% of stroke victims survive the first

Unfortunately, what these statistics do not show is the financial burden to both the employer and the employee that often follows the diagnosis.

Group C.I. vs. Personal C.I.

Usually, to qualify for personal insurance products, the applicant is required to prove good health.  With personal C.I. products, the insurer will likely require medical history not only on the applicant, but also on their immediate family in the event of a potential hereditary disease.  This can be very frustrating to the applicant who may not qualify for coverage even though they are in excellent health but have a family history of, for example, cancer or heart disease.

Group coverage on the other hand will often contain a pre-existing condition clause for claims that occur within a certain period of time such as 12 months for any medical issues that occurred 6 months prior to the enrolment in the program.  Coverage however is guaranteed and is offered without medical information.

Should you offer C.I. Insurance to your Employees?

We believe this benefit fills a critical role in financial plans of your employees and is designed to complement other disability, life and extended healthcare benefits.  It helps to relieve financial stress so your employees can focus on the healing process.  Call us to discuss adding this valuable benefit to your program.