Critical illness. Better safe than sorry

Having insurance in Canada is more than a simple precaution. It is practically a requirement since everything is very expensive and it’s always better to be prepared for unpleasant surprises of life. Originally from Vila do Conde in Portugal, Silvia Azevedo has been in Toronto for 11 years and is a personal insurance expert. She explained to Wave magazine what Critical Illness Insurance is: insurance that covers expenses if you become seriously ill.

Wave: How did this type of insurance come about?
Silvia: The history of “Critical Illness Insurance” is very interesting. Strangely enough, it was not an insurance company, who invented this type of health insurance, but a Medical Doctor. Dr. Marius Barnard was a cardiac surgeon who was part of the team that performed the first human-to-human heart transplant in South Africa in 1967. As a surgeon, he helped many patients recover from their illnesses, but at the same time, it bothered him to see them suffer financially in the following years, as they were unable to return to work at full capacity. Exactly for this reason, Barnard, after much thought, came up with the idea of creating critical illness insurance. It took several years for Dr. Barnard to convince insurers. It was only in March 1983 that two brothers contacted Dr. Barnard because they had recently acquired a small insurance company and wanted to develop a product that was new to the industry. That is how the first Critical Illness Insurance policy was developed. It initially covered four of the most common critical diseases: cancer, heart attack, stroke and coronary artery bypass surgery.

Wave: But the insurance now covers other diseases…
Silvia: Nowadays this insurance covers more than 30 serious diseases, varying a little from company to company. It is valid for adults and children. There are two types: permanent or temporary. Temporary has the advantage of securing larger amounts of insurance for a more affordable price. For Permanent, the biggest advantage is that you always pay the same amount without renewals and there is even the option to get back everything that you pay at the time of cancellation, which can generally be done after 15 years or at 65 years, which is generally when we want to stop working, so it becomes a small savings.

Wave: Do children have more advantages?
Silvia: Permanent plans are more advantageous for children. In addition to early coverage, it is much cheaper than for adults. The price will be the same over the child’s lifetime, and even if the insurance is not used by the age of 25, children automatically receive 75% of what was paid. You can even continue with the valid plan and, if you prefer to continue until age 65 and only cancel after retirement, you will get back everything you paid after the age of 25. For both adults and children, there is still the option of getting all payments back, in case of death or if you have not needed to use the insurance.

Wave: Are there any restrictions?
Silvia: There is always the medical check when the client applies, to make sure that if something happens, you will be qualified from the beginning for the benefit. When there are serious pre-existing conditions that would be covered by this insurance, there may be exclusions, limitations and the payment may even be denied by the companies, so it is advisable to do it in the “healthy years” to enjoy insurance if any unfortunate serious illness event occurs.

Wave: How are insurance payments made in case of serious illness?
Silvia: Payments are made in single installments to the beneficiary without fees. The money can be used in the most convenient way possible. Whether for medication, nursing, treatments, bills, home mortgage payment, education for children, a nurse, changes in your home for better comfort, etc. It is important to note that for the time being it is only possible to issue this type of insurance for Permanent Residents or Canadian citizens.