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What is the difference between Disability Insurance and Critical Illness insurance?

Features of Disability Insurance:

• Provides a replacement income when you become sick or injured.
• Unlike plans provided through employers that can end if you lose your current job, personal disability insurance plans cannot be taken away from you.
• Disability insurance costs and options are highly dependent on one’s occupation; a person with a dangerous occupation is more likely to become disabled, so they will have higher costs and fewer options.
• After age 65, modified coverage may be continued on an annually renewable basis as long as the insured continues to work full time. The benefit period is typically 24 months.
• The amount of coverage you purchase cannot exceed approximately 66% of your current earnings (ie/ cannot insure what you do not have). 66% of your income may not sound like enough to survive on, but the money paid from a disability insurance claim is tax free. After taxes, it is approximately equal to your regular income.

• Provides a lump sum of tax-free money 30 days after you are diagnosed as having an insured illness (ie/heart attach, stroke, cancer).
• Is independent of your ability to still work.
• Thanks to modern medicine, most people now survive critical illnesses, but the financial costs can be staggering. Critical Illness insurance helps you maintain your financial footing, while getting the best treatments possible.
• Must survive at least 30 days in order to collect.
• If the insured dies, all premiums are refunded to the beneficiary (standard feature for most critical illness insurance plans.)
• Available to people between the ages of 18 and 65.
• Available as a stand alone policy or as an additional feature within another life insurance policy.
• Important Statistics: 1 in 3 Canadian will develop a life threatening cancer. Many drugs used in the treatment of cancer are considered experimental and are therefore not covered by provincial medical plans.  The average age of people who go on claim for Critical Illness Insurance is 43 years old.
• Benefits range from $25,000 up to $2,000,000
• Coverage can be for 20 years, to age 65, to age 75, or to age 100 (permanent coverage)
• Return of premium: premiums will be returned to you if you do not claim after 10 years or by age 75
• Available in two forms: Basic & Comprehensive. Basic plans cover heart attach, stroke, and cancer. Comprehensive plans cover heart attack, stroke, and cancer, as well as up to 18 other illnesses.

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