Homebuyers who want to protect their mortgages from life’s ups and downs are often left behind on critical illness insurance. However, in the opinion of Michel Savard, Director Business Development, Insurance, at National Bank, homeowners have an interest in learning to consider this safety net adapted to the aging of the population and our growing vulnerability to certain common diseases.
The likelihood that a person will develop a critical illness during the time they are responsible for paying off their mortgage is much higher than the probability that they will die during the same period. So statistically, it’s best to be aware of this insurance product designed to offset the fact that we are increasingly surviving serious or life-threatening illnesses.
It is also a doctor, Marius Barnard, who is at the origin of this insurance protection that appeared in the early 80s in South Africa. Brother of the surgeon who passed the first heart transplant in 1967, he found that not only was it possible to survive previously lethal diseases but that patients often came out of their convalescence with financial difficulties. He therefore encouraged insurance companies to offer protection in the form of a lump sum that would be paid to the insured to help cover certain expenses in the event of a critical illness diagnosis.
Typically, critical illness insurance offered by financial institutions covers the three most frequently diagnosed medical conditions in Canada: heart attack, stroke, and most cancers when they pose a threat to life. that is, when they are not at an early stage (eg stage A). This is why insurance contracts can sometimes seem complex to customers. Medical terminology is needed to allow doctors to determine whether a particular condition is covered or not.
Many people ask themselves this question with good reason. In fact, they are two products that, while complementary, do not meet the same needs. Disability insurance makes it possible to replace part of the income during a work stoppage, while critical illness insurance ensures the payment of a large sum of money when it is needed most.
A critical illness loan insurance therefore allows a person to take the time to heal without fear of getting into more debt?
Exact. Last year, National Bank Insurance paid close to $ 20 million in benefits to people who had taken out this insurance. It’s so much money that these sick people, unable to work for one or more years, did not have to dig into their economies. In fact, sick people, poorly protected, can swallow their RRSPs to preserve their home and provide for their daily needs during their convalescence. This will obviously have a big impact on their quality of life in retirement.
It must also be taken into account that in addition to all the usual financial obligations to be met, be it mortgage, groceries, or expenses for children, sick people may have to pay an annual average of 32 $ 000 * during their treatment and convalescence.
Because we have a public health system in Quebec, we tend to think that falling seriously ill does not cost anything. But many people with cancer have to travel out of their area to receive treatment, which includes transportation, lodging and food for loved ones, among others. Then you should know that some of the drugs that lessen the side effects of chemotherapy are not covered by the public plan. This is also the case for some cancer treatments that are not covered by health insurance. This explains that having a serious illness can be very expensive.