Understanding the Importance of Critical Illness Insurance for Employees and Employers

Understanding the Importance of Critical Illness Insurance for Employees and Employers


Traditional health insurance coverage is a significant benefit for employees across Canada. But, sometimes this government insurance isn’t enough to cover the ever-increasing costs of prescription drugs and the devastating financial impact of missing work due to illness.

It’s not that health insurance isn’t helpful; it’s that it’s not always helpful enough. Catastrophic illnesses like cancer, heart attacks, and strokes easily outpace health insurance benefits — leaving workers with little-to-no financial options. To help mitigate this issue, many employers are turning towards critical illness insurance, which is an optional healthcare benefit that helps shield employees from exorbitant medical costs.

What is Critical Illness Insurance?

Over 2.4 million Canadians live with heart disease, costing the Canadian economy over $20.9 billion yearly. And over 200,000 people will face a cancer diagnosis this year. Unfortunately, typical healthcare benefits only cover a portion of the costs for these catastrophic illnesses. This often leaves people and their families dealing with extreme financial stress — not to mention the health-related stress.

In fact, some cancer medications can cost upwards of $10,000 per month. Given that the average Canadian has ~$800 in savings, this can be a serious financial stressor. There’s a reason that 40% of ALL people who file for bankruptcies have missed at least two weeks worth of work due to medical issues (over 10% pay for expensive drugs out-of-pocket) — dealing with critical illnesses can be extremely expensive.

Critical illness insurance provides employees with lump-sum cash to help with the expenses relating to critical illnesses. Not only will critical illness insurance help cover the medical costs, but it can also help employees deal with other contributing financial stressors, such as time off work and missed financial opportunities.

Why Critical Illness Insurance?

To really put the importance of critical illness insurance into perspective, let’s put it this way:

  • 1 in 2 Canadians will be diagnosed with cancer during their lifetime.
  • 50,000 people will have a stroke each year in Canada, and 75% of those people will have a long-term disability and recovery.
  • 90% of Canadians have at least one heart attack and heart disease risk factor

While high-priced medical treatment may drive many critical illness patients into bankruptcy, it’s the lost time that impacts most people. Once you suffer from a heart attack or stroke, it’s often not possible to simply go back to work. There needs to be recovery time to deal with the illness. This recovery time can lead to high costs. You may not have any income, and this can lead to serious financial stress for many families across Canada.

To help safeguard against the extreme costs associated with these critical illnesses, employees across the country have opted-in for critical illness insurance. In fact, critical illness insurance is the fastest rising insurance across Canada. And many employers are utilizing it to keep their employees happy and engaged at work.

In short, critical illness insurance can be the beacon of light at the end of the tunnel for employees struggling with critical illness expenses and medical debt.

Critical Insurance FAQs

How Much Does Critical Illness Insurance Cost?

The costs associated with critical illness insurance will depend upon the type of insurance package you purchase. In general, the better the insurance package, the more the deductibles. For businesses, this also means that better packages may be more tempting to prospective employees.

For employees, purchasing this insurance will depend upon your unique needs. For the majority of Canadians, a $1,000 medical emergency will push them into debt. In this case, it makes sense to get an insurance package that covers multiple years to safeguard you against the overwhelming medical and lost-work costs associated with critical illnesses.

However, if you have a healthy emergency savings, you may be able to opt for a small package to assist you with the initial burst costs of critical illnesses. It will depend upon the person. We recommend you ask yourself the following questions:

  • How much money do I have in savings?
  • How rapidly will I default on my mortgage without any income?
  • Am I financially prepared for a lengthy hospital stay and recovery?
  • How much do I need to provide for my family and children?

We recommend purchasing enough insurance to cover 2-years worth of expenses post-incident. The average stroke takes around 2 years to recover from. Of course, cancer can take many years, so you may opt to get many years worth of expenses covered. But, we recommend 2 years as the minimum.

How Much Is the Critical Illness Insurance Lump Sum Payment?

Again, this will depend upon the specific package you purchased. Simplified and underwritten policies will both offer drastically different payouts. We recommend discussing this with your insurance provider. Some plans may have lump-sum payments starting at $5,000, while others may pay out over $100,000. It depends on your needs.

What’s Covered Under Critical Illness Insurance?

It depends on which insurance provider you choose. Some insurance providers will only cover cancer and heart attacks, while others provide coverage for a wide range of critical illness conditions. Contact us to learn more!

What If You Make a Rapid Recovery?

You are entitled to the full benefits package of your critical health insurance whether or not you make a full and speedy recovery.

Final Thoughts

When critical illness strikes, will your employees be ok? Critical illness insurance acts as a safety umbrella for your employees and gives them the financial support that they need in times of crisis. With a wide range of critical illness insurance options, BPGS can help your business find value with critical illness insurance. We’re not here to offer you expensive packages that you don’t need.

We treat all of our customers like family. We want you to be covered in case something catastrophic happens. With critical illness insurance’s lump-sum cash payment, you can focus on what really matters during a critical illness event: you, your family, and your life — not bills and payments.

Contact us to learn how we can help you find your peace of mind with critical illness insurance.

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