Critical Illness is defined by the insurance industry as a life threatening illness from which, in all probability, you will

recover. The problem is that you may lose time from work and lose of income because of it. You may have additional

expenses that cannot be anticipated. Your financial well being may be threatened because of any of a variety of illnesses.

Critical Illness Insurance helps people by offsetting some or all of the financial loss. As a plan of insurance, it fills the gap

between Life Insurance and Disability Insurance. Life Insurance, as everyone knows, provides liquidity cash, at death.

Disability Insurance, also known as Income Replacement, provides an income to offset employment earnings.

Death is straightforward. You die they pay. Disability Insurance is a little more complex. The insured person needs to

qualify to receive this benefit. It is possible to have a serious illness and not qualify for income replacement. On the other

hand, you may qualify for Critical Illness benefits even though you are not disabled to the point of being unable to work.

Most people have heard of Dr. Marius Barnard and his brother, Christiaan. They performed the first heart transplant surgery.

 Dr. Marius Barnard is credited with creating the concept of critical illness coverage. The first product was launched over

twenty years ago in South Africa. This concept has spread to many other countries, England, Australia, Japan and many

others. Finally, about four years ago, it came to Canada.

Dr. Barnard got the idea when he noticed the change from patients dying with certain illness to that of surviving them. These

survivors needed money. He states that during the past twenty years the dynamics of modern

medicine have changed considerably. Illnesses that would have resulted in death are curable now.

These critical illnesses may not cause death, but they often do cause financial hardships.

Critical illness frequently causes a life style change and that may rattle your financial well being.

Why do you need Critical Illness insurance?

Many people believe that if they have adequate life insurance and a proper disability income plan that there is no need for

another type of coverage. People who have saved and invested well feel that they can weather the storm. That may be so,

indeed. The question is, however, why should you expose your financial security to this risk? As pointed out above one

could easily not qualify for income replacement, but still suffer a financial loss from an illness. Consider the scenario in which

you do not die, and you are not considered disabled in such a way that you cannot work. Nevertheless, your energy level

could be depleted some what. You may want to shorten your work week. You may have to take early retirement.

The conjecture list goes on and on

When you survive one of the covered conditions beyond the waiting period you get a tax free lump sum to be used as you 

may desire. You may use it to get medical treatment not covered under your government insurance, or group medical

coverage. Some people travel to another country to get specialized treatment. You may require special equipment in order to

accommodate a new lifestyle caused by your medical problem. There is no restriction on how you use the funds.

Payment is usually a one-time lump sum. You may want to use it to pay debts, cover extra medical bills, or take a

convalescent vacation to help recovery during a difficult time.

*The benefit payable for non-life threatening conditions is 10% of the sum insured to a maximum of $10,000.

It is payable only once and it does not reduce the amount payable for a subsequent covered impairment.

 suffer a life threatening cancer. The combined survivor rate for more than five years is about 62%.

Critical Illness Insurance provides a tax-free, lump sum payment when you survive the

waiting period following diagnosis of a covered medical condition. The usual waiting

period is thirty days.

A serious illness or a medical intervention, such as surgery, can affect your life

profoundly.

Immediate financial consequences may include:

Could it happen to you? You can read the statistics above. The incident of occurrence

may be even higher than those recorded in the year 2000. There are very few people who

do not know someone who has suffered from one or more of these ailments. As Dr.

Barnard points out, the good news is that more than ever people are surviving to lead

normal lives. The scary part of surviving any of these ordeals is the financial loss that

may follow.

Critical Illness Insurance may be purchased in any amount from $25,000 to $2,000,000.

In my opinion the most critical years to purchase this coverage is between age 35 and age

55. This does not imply that no one under age thirty-five is in danger. It certainly does

imply that people over age fifty-five have an increasing risk of one or more of these

problems. As with other types of insurance, the younger you are the less expensive the

coverage will be. Most companies offer coverage to age seventy-five. Some offer it to

age 100.

What if you buy the plan, pay premiums for forty years or more and never have a claim?

You can get most of the premiums paid returned. It.s a no lose situation. The only danger

of loss is not having this insurance when you need it.

Your other insurance benefits are not affected by a critical illness claim. It would be

possible to receive the full lump sum of your Critical Illness plan, plus monthly disability

income payments, and eventually, when you die, the final installment.life insurance.