Cancer Insurance vs Critical Illness Insurance

Critical illness insurance can give you extremely flexible lump sum coverage for any number of critical illnesses, such as cancer, heart attack stroke, multiple sclerosis or heart disease, so why would anyone purchase cancer insurance, which is essentially a smaller critical illness policy that only covers cancer?

Well, it starts with the fact that cancer is the number one cause of death for Canadians, according to The Canadian Cancer society. After all, they report that two in five Canadians will be diagnosed with cancer in their lifetime, so the likelihood of diagnosis is pretty high…

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Importance of protection against cancer

“Cancer is 70% of all critical illness claims right now,” says Mark Dziedzic, director of sales for IA Excellence, which sells the cancer insurance product, Cancer Guard.
“A lot of people are unable to qualify for a comprehensive critical illness plan because the underwriting is so stringent. It’s harder for people to qualify under a standard critical illness policy than it is for them to qualify for life insurance.”
But what is it that keeps them from qualifying for a standard and comprehensive critical illness coverage?

“It can be any number of things,” continues Dziedic. “It can be family history, weight issues, a past illness that could indirectly affect their rating on a full-underwritten, more comprehensive critical illness product, so cancer insurance is a great alternative for someone who wants coverage, but may not qualify for regular critical illness coverage.”
So besides easier access to coverage for one of the most common critical illnesses being diagnosed in Canada and much more permissive underwriting requirements, what else does cancer insurance offer that critical illness insurance can’t?

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

Of course, given that it only covers one illness, means it’s also much cheaper than traditional critical illness coverage. For example, if a 35-year-old, female non-smoker takes out a $100,000 Critical Illness Term-to-75 policy through BMO. If she adds the return of premium on death on surrender feature; her monthly premium is $100.80. IA Excellence’s Cancer Guard Term-to-75 policy will only cost a 35-year-old male non-smoker only $66.80.

Exclusions in insurance policies

Of course, there are exclusions for both critical illness and cancer insurance policies, but there are more with critical illness policies given the stringent underwriting through medical tests and health questions.

The exclusions for the IA Excellence’s Cancer Guard have to do with certain forms of cancer that it doesn’t cover such as melanoma that’s less than a millimetre thick, certain types of prostate cancer at a certain stage and other skin cancers that have yet to be malignant. It’s also important that you don’t have various pre-existing conditions. The main exclusion is a 90-day moratorium on coverage if you are diagnosed with cancer in the first 90-days after being approved for the policy. The pre-existing condition exclusion means you cannot have signs, symptoms or been tested for cancer 24 months prior to getting coverage and 24 months after being approved for coverage.

All in all, it’s also important to note that for extra money, Cancer Guard does have a critical illness rider, for those who still want coverage for more than cancer. The illnesses covered include heart attack, stroke, coronary artery bypass surgery and a variety of juvenile critical illnesses for kids, such as cerebral palsy, muscular dystrophy and type 1 diabetes. There’s also a prevention rider, which covers the skin cancer that is less than a millimetre and the other cancers that are normally excluded from coverage. The two riders are priced separately and can be added to the main policy for a slightly additional cost.

Go Back to Life Insurance for Cancer Patients Overview.

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