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Do you know about critical illness insurance & life insurance?

Life insurance and critical illness insurance address two very different concerns. Critical illness insurance helps you if you are diagnosed with a serious illness1. Life insurance helps your loved ones if you pass away. Let’s examine both in more detail:

How does critical illness insurance help you?

With advances in medicine, more people are surviving a critical illness such as cancer, a heart attack or stroke. But recovery can be lengthy and come at a significant financial cost, such as:

  • Time off work (lost wages for yourself or a caregiver)
  • Expenses (such as travel for treatment or new treatment options that can come at a high cost)
  • Child care

If you survive the waiting period of a covered condition, your critical illness insurance payment will allow you to focus on your recovery and not your finances.

Great to know facts about critical illness insurance:

  • You get a lump-sum payment1&2 which you can spend as you wish. This is very different from other benefits: Extended Health Care coverage reimburses only a portion of eligible medical expenses, while Long Term Disability (LTD) Insurance is paid monthly over a period of time while you are unable to work. With critical illness insurance, you’ll never have to account for your spending and you’ll get paid whether you are able to work or not. Finally, a critical illness insurance payment will not reduce your LTD payments, and vice versa.
  • You, or a benefit payee you named in writing, get paid the benefit by cheque after your claim is approved and the waiting period is satisfied.
  • Hopefully you make a full recovery, and if you do, you still get the full benefit payment. The whole point is for you to get better, and not have to worry about your finances.
  • If you are diagnosed with more than one covered illness, the benefit typically is paid only once for the first condition, after which your coverage ends. Any existing coverage for additional family members will typically remain in place.
  • If you already have critical illness insurance with Sun Life and have been diagnosed with a covered condition, please contact us toll free at 1-800-669-7921. A Customer Service Representative will promptly send you a claim form to complete.
  • Find out how much critical illness insurance you need.

How does life insurance help my family?

Life insurance is a benefit paid when you die to the person (or people) you name as your beneficiaries or to your estate (if there’s no named beneficiary).

The payment helps your family continue to have the life you would want them to live if you are no longer alive.

Having enough life insurance can help your loved ones pay expenses like:

  • funeral costs (the average funeral costs $10,000)3,
  • final expenses, such as your income tax,
  • outstanding debts and bill payments,
  • child care and post-secondary education costs,
  • replacing your lost income and work-related health benefits, and
  • mortgage payments.

Great to know facts about life insurance:

  • If you’re single you might wonder if you need life insurance. The benefit payment can help your parents or siblings cover unexpected costs, such as your bills, debt and the cost of your funeral, and help reduce stress.
  • Your beneficiaries can use the money however they choose.
  • Unlike Mortgage Insurance (creditor insurance), which pays your outstanding mortgage balance to your financial institution, life insurance gives your beneficiaries a lump-sum payment.
  • Find out how much coverage you may need with our life insurance needs calculator and our Life Stage Planner tool.

Tools & Resources

Footnote

1 Diagnosis of a critical illness must occur after the effective date of coverage and you must complete a survival period (usually 30 days). The claim must be approved by Sun Life Financial.

2 Based on current tax laws, we believe that any cash benefit from a group critical illness insurance plan will not presently be taxed when the premiums are paid for by the plan member and the benefit is payable to the plan member.”

3 Statistics Canada, The Daily, January 17, 2001