Critical illness insurance vs. cancer insurance: What's the difference?

Insuring yourself against cancer

Critical illness insurance vs. cancer insurance: What to know



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Q: What is cancer insurance, how does it differ from critical illness insurance, and how do I know if I qualify?


A: There are some key differences between Cancer Insurance and Critical Illness Insurance. For instance, Cancer Insurance only pays out if the insured is diagnosed with cancer. Critical Illness Insurance, on the other hand, pays out if the insured is diagnosed with cancer as well as other illnesses that can include stroke, heart attack, coma, paralysis, loss of hearing and loss of sight. About 70% of all critical illness claims are for cancer.

Several companies offer Critical Illness insurance in Canada, whereas Cancer Insurance is primarily offered by one carrier IA Excellence which offers a product called Cancer Guard.CancerGuard is a guaranteed issue cancer insurance product that covers you for up to $150,000 in the event of a cancer diagnosis. No medical exam is required.

There are also differences in cost. Cancer Insurance is less expensive than a full Critical Illness plan and a lot of people are unable to qualify for a comprehensive critical illness plan because the underwriting is so stringent. So it’s harder for people to qualify under a standard critical illness policy than it is to qualify for Cancer Insurance.

Cancer insurance offers coverage from day one of diagnosis of life-threatening cancer while with most critical illness plans, there’s at least a 90-day waiting period. This is certainly important for people who need treatment quickly.

To qualify for Cancer Insurance you must meet the criteria below:

  • Be under the age of 65 at time of purchase
  • Answer these two eligibility questions for coverage up to $50,000:

1. Have you ever been diagnosed with AIDS or tested positive for HIV?

2. Have you noticed signs or symptoms or been diagnosed with any form of cancer, malignant tumour, lymphoma or leukemia.

Answer two more questions for coverage up to $100,000:

1. Have you had an application for critical illness or cancer insurance declined or postponed within the past two years?

2. Have two or more members of your immediate family been diagnosed with cancer before the age of 60?

For coverage up $150,000, you have to answer one more question

1. Has one or more member of your immediate family suffered from or been diagnosed with breast or ovarian cancer, colorectal cancer or familial adenomatous polyposis before the age of 60?

Be sure you understand the terms, definitions, and restrictions set out in these policies. For more details, talk to your financial planner or insurance agent and read this.

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Lorne Marr, is the founder of LSM Insurance, an independent Canadian Life Insurance Brokerage company in Markham, Ont.