(NC)—Critical illness insurance provides a lump-sum payment should you become seriously ill with an illness or disease like cancer, heart attack, stroke, multiple sclerosis, or paralysis. The exact amount of the insurance payment varies from policy to policy and the terms depend on the degree, or the severity of the illness or disease.
Critical illness insurance is not the same as long-term care insurance, or disability insurance. Long-term care policies generally reimburse to a specified limit, the expenses for care due to a chronic illness, disabling condition, or cognitive impairment. Disability insurance replaces income on a monthly basis if an insured illness or accident prevents the ability to work.
Critical illness insurance provides a financial safety net, particularly for high-risk individuals, but it cannot be purchased for pre-existing conditions.
Before purchasing critical illness insurance, consumers should read the terms carefully and get answers to all questions, says the Financial Services Commission of Ontario. FSCO is the regulator of the provincial insurance industry and offers a guideline on this topic. Highlights from the guideline include:
• Before buying critical illness insurance, consider the benefits that may already be available to you through other policies, such as life and health insurance, on a group or individual basis. Be aware that private or supplementary health insurance plans have coverage limitations.
• If you die for a reason not covered by the critical illness policy, the premiums you paid may be refunded to your named beneficiary. Some plans will return the premium, or a portion of the premiums paid, if the policy matures and no claim has been paid.
• You are entitled to collect the entire benefit, even if you make a full recovery.
More information about this and other financial service topics is available online at www.fsco.gov.on.ca. Look for the publication Understanding Critical Illness Insurance in the Consumer Brochures section.
- News Canada
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