Some people may not be aware of Critical Illness Insurance as a possible option or addition to Disability Insurance. The table below highlights some of the major differences in coverage and benefits between the two programs. You request a quote for disability insurance, critical illness insurance or both.
Disability |
Critical Illness |
|
Considerations at application |
Health Condition & Health History, Occupation, Job & Income |
Health Condition & Health History |
Coverage Period |
Ends at age 65 - may be extended to age 67 |
Variable, to 75 and longer |
Benefit |
Paid over a period on months for a specified period of time |
Paid in a lump sum and, in most cases, paid 30 days or less after diagnosis |
Taxability of benefits paid |
Tax-free if premium paid by individual, taxable if paid by employer |
Tax-free |
When are benefits paid? |
Inability to work, definition of work may vary with policy wording allowing for different levels of coverage |
Diagnosis of any one of several specified conditions as described in the policy. You do not have to be terminally ill to file a claim (unlike some life insurance policies) |
Level of Benefits paid |
Related to income, maximum of 65% to75% at time of claim |
Linked to income, $25,000 to $500,000 lump sum benefit regardless of income (may have a maximum amount available at application) |
Partial benefits payments? |
Available with some policies |
Not applicable. One lump sum benefit paid |
Inflation protection, retirement saving protection, etc. |
Available for extra premium |
Not Available. Policy can be supplemented over time |
Child protection rider |
Not Available |
Available |
Minimum abd maximum benefit |
From nothing to very high, depending on benefit payment period |
All or nothing |
Multiple benefit periods |
Yes, multiple claims may be paid |
Yes, multiple claims may be paid |
Availability of premium refund |
Partially, with extra premium if benefits not triggered |
All paid back if policy expires or death occurs without claim |
Claim difficulty |
Sometimes when extent of disability in dispute |
Less likely since disability never an issue in claim, only diagnosis of disease |
Elimination period |
Varies: 0, 30, 60, 90, 180, 360, 720 days common, premiums vary with wait period |
Benefit paid after 30 days. If death occurs prior, premiums are refunded |
Premium |
Varies with occupational class |
The same for all |
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