Critical Illness Insurance

We are a boutique financial planning and investment firm based in Oakville. Ensure your retirement savings are protected from life’s unexpected turns.

Our team can provide you with critical illness insurance solutions and the best critical illness rates on the market.

Contact us at (416) 274-1322 and keep scrolling to learn more.

The Basics

What would have the biggest impact on your life?

  1. Car getting stolen
  2. House getting broken into
  3. Losing your favourite jewelry item
  4. Being diagnosed with cancer

Then why is it most people are insured for the first 3, but not the last?

Critical illness (CI) insurance provides a tax-free lump sum of money to you 30 days after being diagnosed with one of the covered conditions.  The big three are cancer, heart attack and stroke.

Use of Policy Payout

The proceeds of a critical illness insurance payout can be used for a variety of things, including:

  • Finding the best health care
  • Hiring a nurse/caregiver
  • Helping to pay down debts
  • Income replacement for you and your spouse
  • Protecting your retirement savings
  • Helping your business survive
  • Miscellaneous expenses (flying loved ones to see you, hospital parking, etc.)

llustrative Example

With a critical illness policy, you’re protecting one of your most valuable assets, your retirement savings.  Your retirement savings should be used for retirement, not as an emergency fund for life’s unknowns.

Here’s an example why:

At age 25 you started saving $450 / month in your TFSA.  Assuming a 5% annual rate of return, you'd have $216,000 by age 47 and $687,000 by age 65.

What if you had to withdraw $200,000 at age 47 because you were diagnosed with cancer and could not work?  Assuming you could continue to save $450 / month, you’d have $196,000 at 65.

Withdrawing $200,000 at 47 cost you $491,000 at retirement.  Retirement at 65 isn’t looking too promising.

Critical Illness Insurance Rates

$50,000 10-year critical illness insurance, non-smoker*

Age Male Female
20 $ 16 $ 16
25 $ 17 $ 17
30 $ 19 $ 18
35 $ 22 $ 22
40 $ 28 $ 30
45 $ 41 $ 42
50 $ 60 $ 54
55 $ 98 $ 76
60 $ 149 $ 110
65 $ 200 $ 133
70 $ 356 $ 247

*Rates are subject to change, and may depend on individuals' risk factors


Click each question below to display the answer.

Although most of the covered conditions are the same, a few vary depending on which insurance company you use. Cancer, heart attack and stroke are the big 3 and make up approximately 85% of claims.

Most employers do not offer critical illness coverage through group benefits freely, typically you must pay for the addition of CI. Like life insurance, it is always better to own a personal critical illness policy.

Below are key reasons why:

  1. There are significant restrictions with group critical illness insurance, such as fewer illnesses covered
  2. Premium creep: Group insurance critical illness premiums typically renew every 5 years whereas with a personal policy you get to choose the term
  3. Change jobs: If you move jobs your group critical illness insurance will not move with you. If your health has changed it may be difficult to get a new policy

Similar to life insurance there are many different critical illness insurance policies. The most common policies are 10-year and 20-year term policies. There are policies called level T65 and T75 which stay in force until ages 65 and 75 (premium does not change). There are also permanent policies where you have coverage for life.

You can add ‘riders’ on to specific policies that add additional features. For example, the 'return of premium on surrender’ rider provides the owner of the policy all of their premium back if he/she never claims from an illness.

This is true for certain types of policies. How it works is that you must have the policy in force for a minimum number of years, typically 15, at which point you can cancel the policy whenever you want and receive your premiums back. Some people like this additional feature as they see it as a forced savings plan. If they get diagnosed with a critical illness they receive the tax-free lump sum of money. If they don’t get diagnosed with a critical illness they receive their premiums back to help supplement their retirement income.

Determining a specific dollar amount can be quite difficult as your needs aren’t as known compared to when you purchase life insurance. Every situation is different and you can’t predict what illness you may be diagnosed with. Some tips to get a rough estimate include:

  • Time off work: Estimate a minimum of 6 months (1/2 annual salary)
  • Time off work for your partner: Estimate a minimum of 4 months (1/3 of annual salary)
  • Drug costs: OHIP does not cover drugs taken outside of the hospital and, as an example, 50% of newer cancer drugs are taken home
  • Out of country treatment costs if you want immediate help
  • Medical equipment, home modifications, domestic help
  • Miscellaneous expenses: Travel, hotel, hospital parking, etc.

Critical illness insurance is more expensive than life insurance, which makes sense. From a probability perspective, you are more likely to get diagnosed with a critical illness than you are to die. To give you an idea, for a healthy male, $100,000 of 10-year term critical illness insurance costs approximately:

  • $300 / year at age 25
  • $420 / year at age 35
  • $790 / year at age 45

Purchasing a policy with a longer term increases the premium. Adding features like ‘return of premium on surrender’ also increases the premium.

Depending on age and the amount of insurance applied for determines whether there will be a medical.

No, OHIP does not pay for drugs taken outside of the hospital and, as an example, approximately 50% of newer cancer drugs are taken home. 75% of cancer drugs taken at home cost over $20,000 / year and the average cost of a single course of treatment with recent cancer drugs is $65,000.

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