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Last updated: August 14, 2023 | Reviewed by Liane Goulet

What is critical illness insurance?

Critical illness insurance (CII) is coverage that can help Canadians or those living in Canada pay the additional costs associated with life-altering illnesses like cancer, stroke, heart attack and dementia.

Why do I need critical illness insurance?

If you’re diagnosed with a covered illness, your critical illness insurance policy can help you pay for expenses that your provincial or territorial health plan doesn’t cover. 

Many Canadians assume that their government health plan or workplace benefits plan will cover many of the medical costs associated with a life-altering illness. But these plans might not cover all the extra costs that come with managing a critical illness, like home-care costs, travel and/or accommodation, lost work wages, childcare costs, gas and meals. Over time, these expenses can add up. 

With CII, you can receive a lump-sum payment that you can use however you need so that you can focus on your recovery.

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What is critical illness insurance?

Simply put, we’d all like to imagine a future with perfect health. But the right time to plan for the unexpected is when you're healthy. Why? Because once you become ill, your options might be limited.

Critical illness insurance is designed to help you pay costs that may be associated with certain life-altering illnesses.

It provides additional funds if you become seriously ill. This way, you can focus on your health and not your finances.

How does critical illness insurance work?

Let’s say you’re diagnosed with and survive one of the illnesses covered, as defined by your insurance policy. In such a case, you'll receive a one-time, lump-sum cash payment. You can then use that money any way you wish.

Do you need critical illness insurance?

So ask yourself:

  • Do your other insurance policies like life, group health, or disability plans offer enough coverage?
  • Would your retirement goals still be met if you had to take out, say, $50,000 for expenses related to a medical condition?
  • Can you afford to take on the costs associated with being seriously ill? This includes things like:
    • loss of income,
    • travel to and from treatment, and
    • home-care costs.

How can critical illness insurance help you?

It can help with those additional costs that come up.

Chances are you know someone who's been affected by serious health issues. Critical illness insurance will provide you with the peace of mind of knowing you're financially protected in case it happens to you. And, it’ll allow you to focus 100% on your own recovery.

For more tips and tools, visit sunlife.ca.

How does critical illness insurance pay out?

Let’s say you’re diagnosed with an illness covered by your policy and you meet all of the policy requirements (such as survival period). In such cases, you’ll receive a lump-sum payment  once your claim is approved  . 

You can then use this money however you want and for any reason. For example, this can cover out-of-pocket expenses that may not be covered by your provincial or territorial health insurance, such as certain prescription drugs, mortgage, rent, short- or long-term care, etc.

How much coverage can you get?

At Sun Life, we offer 2 critical illness insurance products:  Sun Critical Illness Insurance and Express Critical Illness Insurance. These products offer different amounts of coverage.

Our critical illness insurance products

Sun Critical Illness Insurance

is our most comprehensive critical illness policy.

It can:

  • Cover 26 full-payout illnesses, 8 partial-payout illnesses and 5 full-payout childhood illnesses
  • Provide up to $3,000,000 in coverage for adults and
  • Provide critical illness insurance for children – up to $1,000,000 in coverage
Learn about Sun Critical Illness Insurance

Express Critical Illness Insurance

is our CII solution that offers instant online approval with no medical exam or blood work required.

It can:

  • Offer coverage options for the most common critical illnesses in Canada (like cancer, heart attacks, strokes and more)
  • Provide up to $50,000 in coverage for adults
Learn more about Express CII and get a quote

What does critical illness insurance cover?

It depends on the product you buy. Some policies will cover more critical illnesses than others.

Sun Critical Illness Insurance covers illnesses such as cancer, dementia, organ transplant, heart attack, stroke, paralysis and multiple sclerosis, to name a few. But you won’t receive any coverage if you’re diagnosed with a disease or illness that’s not listed in your policy.

Child plans cover the same 26 full-payout illnesses and the same 8 partial-payout illnesses along .

Here’s a look at the 26 full-payout illnesses covered under Sun Critical Illness Insurance for adults. There are also 8 partial-payout illnesses covered under this plan.

Learn about Sun Critical Illness Insurance

Express Critical Illness Insurance offers 3 plans: Basic, Enhanced and Comfort.

  • The Basic plan only covers cancer.2
  • The Enhanced plan covers cancer,3 heart attack and stroke.
  • The Comfort plan covers cancer,4 heart attack, stroke, coronary artery bypass surgery, aortic surgery, major organ transplant and major organ failure. 

Learn more about these plans

2, 3, 4 Types of cancers include carcinoma, melanoma, leukemia, lymphoma, and sarcoma. Additional criteria, conditions and exclusions may apply. See Express CII Definitions and Exclusions for more information.

The amount of coverage you need depends on your personal situation.

Find out how much a critical illness may cost you and how much coverage you may need to financially protect yourself.

Get critical illness insurance

Talk to an advisor to buy critical illness insurance

Not sure what’s right for you? Talk to a Sun Life advisor. Our advisors look at your specific needs to help you figure out which insurance products you need.

Enter your postal code to connect with an advisor near you.

Get a critical illness insurance quote

You can apply for Express Critical Illness Insurance online and get coverage for $25,000 or $50,000.

Online approval is instant with no medical or blood work required.

Get an Express CII quote

What if I have a CII plan through my workplace benefits?

It’s great to have insurance coverage through your work. But keep in mind that group benefits are only available if you remain with that employer. You may lose your benefits if you ever leave your job.
 

Even if you are covered through your workplace benefits plan, it may be worth talking to a Sun Life advisor about getting your own CII coverage to protect you and your family from a life-altering illness.

Do you have CII with Sun Life through a group benefits plan & plan on leaving your employer but want to keep your coverage?

If you already have CII coverage with Sun Life through a workplace benefits plan and want to keep your CII coverage with Sun Life, then Choices Critical Illness Insurance may be an option for you. A new Choices CII plan can replace your group coverage if you enroll within 60 days of when your work coverage ends .

Learn more about Choices CII

Frequently Asked Questions

Do I need critical illness insurance?

You may need critical illness insurance if you think you can’t afford all the expenses that may arise (including things like some medical costs and living expenses) if you were to get diagnosed with a covered critical illness. It can also help protect you from loss of income in case you need to take time off work to recover.

Read more about CII and if it's right for you

Does critical illness insurance cover pre-existing conditions?

No, it does not cover pre-existing conditions.5 However, in certain cases, we may be able to issue a critical illness policy with your pre-existing condition removed.

Connect with an advisor for more detailed information

5 A pre-existing condition can include any condition you had prior to the effective date of your policy. This includes any condition that required medical care and treatment. The lookback period for a pre-existing condition can range from a couple of months to a year before your policy begins.

Do I need to take a medical exam for critical illness insurance?

It depends on the product you’re applying for. If you’re applying online for Express Critical Illness Insurance, then you won’t have to answer any medical questions or undergo a medical exam. However, if you’re applying for Sun Critical Illness Insurance, which offers coverage up to $3,000,000, then you may need to complete a medical exam during the application process.

Is a critical illness insurance payout taxable in Canada?

In Canada, there are no specific tax laws governing CII policies. However, the Canada Revenue Agency (CRA) has developed its own position on the tax treatment of a benefit paid under a CII policy.

Based on the CRA's current position, Sun Life understands that benefits for individually-owned CII policies are paid tax-free.

Need more help?

Talk to your tax professional.

How long is the waiting period for critical illness insurance?

For CII, the waiting period refers to how long you must wait before you can claim a CII benefit.

The qualifying timeline may depend on the type of illness or disease. The most common type of waiting period for CII is the survival period. In Canada, if included, the survival period is usually 30 days. This means that, in some cases, you are required to survive a minimum of 30 days after the diagnosis of the covered illness before you can submit a claim and receive the benefit. In other cases, you are required to survive a minimum of 30 days after certain types of surgery before you can submit a claim and receive the benefit.

Other covered illnesses or diseases, such as cancer, require your coverage to be in effect for a certain amount of time before you’re eligible for the benefit.

Connect with an advisor for more detailed information

What types of cancer are covered by critical illness insurance?

Our critical illness insurance products cover carcinoma, melanoma, leukemia, lymphoma and sarcoma6. To receive a payout, you must have a cancer diagnosis confirmed by a specialist. It’s important to note that the cancer definition has exclusions. Please refer to your contract or speak with your advisor.

Connect with an advisor for more detailed information

6Additional criteria, conditions and exclusions may apply. See Express CII Definitions and Exclusions for more information.

Does critical illness insurance cover me for my whole life?

It depends on the product you buy. Sun Critical Illness Insurance can cover you for your whole life. But Express Critical Illness Insurance won’t cover you for your whole life.

Connect with an advisor for more detailed information

Does my child need critical illness insurance?

You may need critical illness insurance for a child if you think you can’t afford all the expenses that may arise if your child is diagnosed with a covered critical illness.

For example, you may need to take time off work (resulting in income loss) to take care of your child. In such cases, a critical illness insurance plan for a child would give you a lump sum of money if your child ever gets one of the illnesses covered in the policy.

Here’s how to find out if your children need critical illness insurance

Can I convert my critical illness insurance to a different policy?

It depends on the product you buy. Express Critical Illness Insurance does not allow you to convert your policy. However,  Sun Critical Illness Insurance does offer a plan with a conversion option.

Connect with an advisor for more detailed information

What is the difference between life insurance and critical illness insurance?

The main difference between critical illness insurance and life insurance is how the insurance benefit is triggered.

CII benefits are paid out when you or the insured person is coping with or recovering from a covered illness   

Life insurance benefits, however, are paid out to your estate or named beneficiary when you die.

Learn more about the difference between life insurance and critical illness insurance

How is critical illness insurance different from other types of insurance?

There are 4 common types of health insurance: 

Of these 4, only critical illness insurance provides a lump-sum payment if you’re diagnosed with a covered critical illness. 

Connect with an advisor to find out which insurance products are right for you. 

An advisor can provide more detailed information about critical illness insurance and answer any questions you have.

Enter your postal code to connect with an advisor near you.