Getting your Critical Illness Premiums Back
Posted 23 Oct 2014 by Melissa Allan
We all know someone who was recently diagnosed with a Critical Illness. Whether it was someone in your immediate family, circle of friends, or a co-worker. The shock of this diagnosis is heart wrenching. One should not be worried about their finances at such a time, but chances are they will be.
We hope none of you reading this ever have to receive such a diagnosis, but some of you will. Statistically speaking, most Canadians are walking around with debt, and rely on their pay cheque to get them through the ever-rising costs of day to day living. Critical illness insurance can provide you with a cash benefit to use the way you want, so you can focus on your recovery. You may use this money to pay off debt, get the best medical care money can buy, or simply to enjoy your life while you can.
This is a fairly new product to the insurance market and since it was initially introduced it has significantly been enhanced by adding various illnesses and optional benefits such as Return of Premium: Simply put, if you purchase a Critical Illness Insurance policy you are insured for many illnesses (Cancer, Heart Attack, Stroke, Alzheimer's, Multiple Sclerosis, etc.). If you are lucky enough to sail through life without being diagnosed with one of these illnesses, you could qualify to have your premiums returned at a specified time depending on the terms of your contract.
We love the idea of taking out a lifetime protection policy with the option to surrender at age 65. This still leaves enough time to significantly invest into your retirement fund!
If you do have to make a claim, you will receive a lump sum payment when the specified waiting period has been completed (typically 31 days on the more common illnesses). Should you die before a claim can be made then your premiums will be returned at death to your named beneficiary. Of course, if a claim is made, the policy pays out and no refund of premiums will occur.
Critical illness insurance is designed to insure you when you need it. It is even available for children and when your child turns 25 they could receive a refund if no claim was made.
I wish all products carried this return of premium option (car and home insurance to name two that pop to my head!). Buying critical illness insurance makes sense; we don’t plan on these types of illnesses but we need to make sure we are protected in the event we are faced with it.
If you would like more information on this product and how it could work for you and your family, please let us know. We would be more than happy to discuss it further.