Frequently asked questions: Critical illness insurance

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What is critical illness insurance?

Critical illness insurance was first developed in South Africa in the early 1980s by Dr. Marius Barnard (called dread disease insurance). It was brought over to the UK in 1984 and Canada in the mid-90s. CI has also been called trauma insurance, serious illness insurance, and living assurance.

Coping with a critical illness can bring about a range of challenges, some of which are financial in nature. Critical illness insurance pays a lump sum living benefit on the diagnosis of a covered illness. Unlike other insurance products, it is a living benefit payable to you and not tied directly to expenses you incur (medical insurance), the income you may lose (disability insurance) or your death (life insurance).

The benefit can be used for any purpose the insured desires (e.g., treatment, home adaptation, debt payment, supplement loss of income, family holiday, etc.).

Find out more on our what's critical illness page.

Why do I need critical illness insurance?

Because survival is likely and recovery is expensive. The average cost of a single course of cancer treatment with new drugs is $65,000; almost as high as the average annual income of Canadians.

Critical illness insurance fills the gap between traditional insurance products, allowing individuals who are recovering from a major illness to protect their independence and financial future.

Find out more on our why critical illness insurance page.
What is the early diagnosis benefit?
The Early Diagnosis Benefit is offered to you and your spouse in the PARACHUTE Complete Insurance plan. It pays you 10% of your coverage amount if you or your spouse are diagnosed with one of the following conditions:

This benefit is available only to you and your spouse. Dependent children are not eligible.

What is multiple event coverage?

If you or your spouse receive a benefit amount under a PARACHUTE Complete policy, coverage may remain in force subject to the terms and conditions of your policy, specifically, the following paragraph, provided that premium is paid in accordance with the policy.

The multiple event categories are:

Category 1: Life-threatening cancer

Category 2: Aortic surgery, coronary artery bypass surgery, heart attack (myocardial infarction), heart valve replacement or repair, and stroke.

Category 3: Blindness, deafness, loss of limb, loss of speech, occupational HIV, and severe burns.

Category 4: Aplastic Anemia, bacterial meningitis, benign brain tumour, coma, dementia including Alzheimer’s disease, kidney failure, loss of independent existence, motor neuron disease, multiple sclerosis, major organ transplant, major organ failure on waiting list, paralysis, and Parkinson’s disease and specified atypical parkinsonian disorders

The full coverage amount may be claimed for up to four covered conditions, with one claim being eligible in each of the Multiple Event Categories listed above. The subsequent diagnosis must be made 90 days or more after the date the prior covered condition was diagnosed.

This benefit is subject to the following limitations: 

Once a benefit has become payable, the insured person will not be covered for another claim that is:

  • in the opinion of the insurer, caused by, or contributed to, has spread from or has occurred as a result of the same covered condition;
  • in the opinion of the insurer, directly or indirectly associated with, or is likely to have been caused by, a covered condition that the insured person has already claimed under his or her policy; or
  • for a claim for another covered condition within the same multiple event category as a claim that has already been paid under his or her policy.

This benefit is available only to you and your spouse and is not available for dependent children.

What about early diagnosis benefit conditions?
Payment of Early Diagnosis Benefit Covered Conditions will not affect your ability to make a claim under the multiple event coverage condition categories.

What is the multiple cancer benefit?

If you or your spouse receive a benefit amount under your policy as a result of a cancer (life-threatening) diagnosis, the insured person’s eligibility to claim in the future for cancer (life-threatening) is subject to the definition of multiple cancer below, provided that :

  • no exclusions or limitations apply; and
  • premium is paid in accordance with the terms and conditions of your policy.

Multiple cancer is defined as a subsequent diagnosis of the insured person with cancer (life-threatening), provided that:

  • more than 60 months have passed between the previous cancer date of diagnosis and the date of the subsequent diagnosis;
  • the insured person has not received any treatment relating directly or indirectly to the previous cancer within the 60-month period prior to the subsequent diagnosis (treatment does not include preventive medications and follow-up visits to the doctor);
  • the insured person does not have any new signs, symptoms or deliberate or incidental findings, during the 60-month period prior to the subsequent diagnosis, for which they sought medical investigation, consultation to investigate and or diagnose, diagnosis, treatment, care, medication or medical advice, or for which there were symptoms that should have caused an individual to seek the same relating to a diagnosis of cancer (life-threatening) or cancer (non-life-threatening); and
  • both the first and subsequent diagnoses are made while the insured person is covered under the policy and prior to the termination date.

This benefit is available only to you and your spouse. Dependent children are not eligible.

What is the charitable donation benefit?
When the insurer determines that a benefit amount is payable in respect to a first payable claim, in addition to the benefit amount, the claimant may designate a Canadian registered charitable organization to receive the one-time charitable donation of $500. The insurer will pay this charitable donation to such organization, provided that it may, in its discretion, pay the charitable donation to another Canadian registered charity with similar purposes.
Full definitions and benefit provisions can be found in the policy and all coverage is subject to the terms and conditions of the policy
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