Critical Illness Insurance

Jan 13, 2014

Critical Illness Insurance (CI) is a benefit that is becoming more  commonly offered under employee benefit plans.  Historically, group life insurance, disability, extended health, and retirement plans have been mainstays of any plan offering.  Now Critical Illness, either on a group wide basis or on an optional employee basis, is being more commonly offered. 

 Why is it that this benefit seems to resonate more with employees than say life insurance or disability?  Most all of us have been touched by someone we know or someone close that has had a heart attack, a stroke or cancer.  In fact we are told that these illnesses make up more than 75% of the claims under critical illness policies.  When we see the impact a critical illness has on others, we emotionally wish to protect ourselves and our own families. 

 Critical illness was initially marketed as a way to circumvent the Canadian healthcare system if one wished to do this.  The lump sum cash payout would provide the resources to possibly purchase medical services in the US.  Today, the policy would have to be of a considerable size to allow for this possibility.  More commonly, the money  is used to pay for additional expenses that are not budgeted for or  not covered by provincial healthcare plans or group insurance plans.  Additionally, while the person that incurs the critical illness may eventually receive disability benefits when off work, the primary care giver often becomes the spouse or partner of the individual.  With the numerous appointments, trips to the pharmacy etc, the care giver’s employment (assuming they are working full or part time) can be impacted quite significantly.  The spouse may have to take time off from work and may not have the time or energy to focus on major projects etc.  The cash payout will replace the lost earnings.

 As the economy improves and employers continue to become more creative in their benefit offerings, I am sure the appeal of critical illness will increase and become an even more common benefit provided.

- See more at: http://www.trggroup.com/index.php/2014/01/13/critical-illness-insurance-2/#sthash.Z46okxCe.dpuf
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