Back to all terms

Critical Illness Insurance

Critical illness insurance is a type of financial protection that pays a one-time, tax-free lump sum if you are diagnosed with a covered serious illness such as cancer, heart attack, or stroke. Unlike disability insurance, which replaces a portion of your income over time, critical illness insurance gives you a single payout that you can use however you choose - for medical expenses, household bills, recovery time, travel, or lifestyle adjustments.

Most Canadian insurers cover between 20 and 26 major conditions, although the exact list varies. Policies may include partial payouts for less severe conditions and a return-of-premium option if no claim is made. Some plans also include a “survival period,” requiring you to live for a certain number of days (usually 30) after diagnosis before benefits are paid.

This type of coverage is especially valuable when government or group health benefits do not cover all treatment costs, or when extended recovery impacts income and savings.

Example:

If you are diagnosed with a heart attack and meet your policy’s survival period, a $100,000 critical illness policy would pay the full $100,000 directly to you, which you could use for mortgage payments, home modifications, or out-of-country treatment.

What to Watch For:

Review the list of covered conditions, survival period requirements, and exclusions carefully. Some policies do not pay for recurrent illnesses or pre-existing conditions. Always confirm whether your coverage includes early-detection or partial payout benefits.

Related Terms

Calendar Year

The calendar year defines a benefit period that runs from January 1 to December 31. Many annual maximums, deductibles, and claim resets follow this schedule. It provides a consistent framework across most insurers and simplifies tax reporting for medical expenses.

Certificate of Insurance

A certificate of insurance is an official document issued by an insurance company that summarizes the key details of your coverage. It serves as proof that you are insured and outlines the essential terms of your policy, including the type of coverage, effective dates, benefit limits, exclusions, and any dependents or beneficiaries listed under the plan.

Claim

A claim is a formal request you or your healthcare provider submit to your insurance company to receive reimbursement or direct payment for eligible medical or dental expenses covered under your plan. Submitting a claim provides the insurer with the necessary information - such as receipts, treatment details, and provider information - to verify the service and determine the amount payable according to your policy’s terms.

Claim Submission Deadline

The claim submission deadline is the final date by which an insured person must submit a claim to their insurance company for reimbursement of eligible expenses. After this date, the insurer is not obligated to pay the claim, even if the expense itself would have been covered. This deadline ensures timely processing, accurate recordkeeping, and proper financial reporting for both the insurer and the policyholder.

Claimant

A claimant is the person who submits a request for reimbursement or payment under an insurance policy. In health and dental insurance, the claimant is usually the insured individual who received the service, such as a medical treatment, prescription, or dental procedure. However, a claimant can also be a parent, spouse, or legal guardian submitting a claim on behalf of a covered dependent.

Have questions about your insurance coverage?

Our licensed advisors can help you understand your options and find the right plan for your needs.

Contact Us