The best time to plan for the unexpected is when you’re healthy. Why? Because if you become ill, your options are more limited.

Let’s say your doctor diagnoses you with cancer.

They say your chances of overcoming it are good. But the weeks of treatment and recovery may come at a high price. Not just physically and emotionally but financially too. While provincial health care covers your treatment, your spouse may have to take time off work. Or you may need to take expensive drugs provincial health care doesn’t cover.

Where will the money come from? You could raid your savings, rack up your credit cards or borrow against the value of your home. But these options could disrupt your retirement plans. Critical illness insurance can help.

What is critical illness insurance?

Critical illness insurance helps to pay costs associated with life-altering illnesses. It allows you to focus on getting better by helping you:

  • Replace any lost income if you or your spouse need to take time off work
  • Reduce any debt that may have built up while you cope with your illness
  • Provide financial support if you need professional help at home
  • Consider treatment options your provincial health care won’t cover.

Watch: What is critical illness insurance? (Video)

How does critical illness insurance work?

If you’re diagnosed with one of the illnesses covered under your critical illness insurance policy, you should carefully review the wording of your contract and submit a claim. If you’re eligible, your claim will be approved and you’ll receive a tax-free* payment. You can use that money for whatever you want.

If you have disability insurance or health-care benefits through your employer, it’s important to understand exactly what those benefits cover. And for how long. It’s a good idea to review your disability policy or health-care benefits. Compare them with the features of a critical illness insurance plan. You might want to compare:

  • Maximum benefit amounts
  • Deductibles and waiting periods
  • Employment requirements (e.g., you can't take benefits with you when you leave your job)
  • Percentage of income replaced, and for how long

Is critical illness insurance right for you?

You will probably want to consider whether your other life insurance, group health or disability plans offer enough coverage. Will you still be able to meet your retirement or other financial goals if you have to pay medical expenses? Can you afford the loss of income, travel and home care expenses?

There’s no one-size-fits-all financial plan. But critical illness insurance may be just what you need to help protect you and your family.

Surviving critical illness

In 2017, the Canadian Cancer Society reported that 565 Canadians were diagnosed with cancer every day. The Heart and Stroke Foundation says heart disease and stroke are the leading causes of death in Canada.

But medical advances mean that more Canadians are surviving life-altering illnesses than ever before. If you have critical illness insurance, your finances could be one less thing you need to stress about.

Financial planning considers not just building your savings, but also protecting it. An advisor can help you to determine how critical illness insurance can support your overall financial plan.

*There are no specific income tax laws for critical illness insurance. Based on current tax laws, Sun Life believes any cash benefit from critical illness insurance won’t be taxed when the policy is owned by an individual and the benefit is payable to them.