How much is critical illness insurance in Canada?

The cost of critical illness insurance can vary depending on your age, lifestyle, and coverage amount. While no one plans for a life-altering illness, the financial impact of a critical condition can be as devastating as the diagnosis itself. 

In this guide, we’ll take you through the cost of critical illness insurance and share tips to help you find affordable coverage.

What is critical illness insurance?

Critical illness insurance is a type of coverage that provides a lump-sum payout if you’re diagnosed with a serious illness covered by the policy, such as cancer, heart attack, or stroke. This money can be used for medical expenses, lost income, or other financial needs during recovery. 

Unlike traditional health insurance, it offers financial flexibility to help cover non-medical costs like mortgage payments or home care. It’s designed to ease financial stress during a challenging time, ensuring better financial security.

What factors affect the cost of critical illness insurance in Canada?

The cost of critical illness insurance in Canada can vary from one individual to another, based on several factors such as age, gender, health status, coverage amount selected, and certain lifestyle choices. 

• Age: Younger individuals pay lower premiums, while rates increase significantly after an individual turns 40
• Health status & medical history: Pre-existing conditions or past illnesses lead to higher premiums or exclusions
• Coverage amount & policy term: Higher coverage and longer terms increase costs. Short-term policies are more affordable
• Lifestyle choices: Smoking, alcohol use, and risky activities raise premiums
• Family medical history: A history of critical illnesses in the family can result in higher rates
• Gender: Men and women face different risks, affecting premium costs
• Insurance provider & policy features: Prices vary by insurer, and added benefits like a return of premium increase costs

How much does critical illness insurance cost in Canada?

In Canada, the cost of critical illness insurance can vary between $15 to $385 per month, based on the age, gender, family medical history, or smoking status of an individual. Here’s what the cost may look like for men of various age groups (both smokers and non-smokers) opting for $50,000 or $100,000 in coverage:

Cost of critical illness insurance in Canada

*Illustrative costs for male individuals of various age groups opting for either $50,000 or $100,000 in coverage

How does smoking status affect the cost of critical illness insurance?

Smokers typically pay higher premiums than non-smokers due to the increased risk of developing serious conditions such as cancer, heart disease, and stroke. This amount can vary between $35 to almost $400 per month, depending on your age and other health complications.

Many insurers classify applicants as smokers if they have used tobacco or nicotine products within the last 12 months. Here’s what you can expect to pay per month to purchase a critical illness insurance plan for the top insurance providers in Canada:

Cost for critical illness insurance for smokers from top Canadian insurers

*Illustrative costs for male smokers of various age groups with $100,000 in coverage

Are there any age-specific discounts for critical illness insurance?

Although it is not typically guaranteed, age-based discounts can be provided by some insurers who offer lower premiums for younger applicants.

Also, some providers offer promotional discounts for specific age groups if you make sure to lock in lower rates by participating in an early enrollment. Group policies that are often purchased by employers or associations sometimes include age-based pricing benefits.

You can compare various plans offered by several companies to make sure which critical illness insurance plan suits your budget best.

How does my occupation affect the cost of critical illness insurance in Canada?

Certain occupations, particularly those with higher physical risks or exposure to hazardous conditions, may result in higher premiums. This is because individuals in these fields are perceived to have a higher likelihood of facing critical illnesses or injuries. Understanding how your occupation impacts your premium can help you assess your coverage options effectively.

Do pre-existing conditions increase the cost of critical illness insurance?

Yes, pre-existing conditions will typically increase the cost of your critical illness insurance plan. Most insurance companies assess an applicant’s medical history during underwriting. Individuals with pre-existing conditions are considered at higher risk as they may fall sick more frequently as compared to healthy individuals.

This is why people with pre-existing conditions may face higher premiums, exclusions for certain conditions, or even denial of coverage. Some policies may offer coverage with a waiting period, meaning pre-existing conditions won’t be covered for a particular period of time after purchasing the policy. 

What is the average critical illness insurance coverage that Canadians typically choose?

The average critical illness insurance coverage that Canadians typically choose ranges between $50,000 and $100,000. This is considered to be an ideal amount that can help cover medical expenses, loss of income, and other financial burdens during recovery. 

However, you can also opt for a higher coverage—up to $250,000 or more—depending on your financial obligations, lifestyle, and family needs. Certain factors such as age, health status, and premium amount may also influence what coverage option you’re going for. Make sure to assess your personal expenses and potential medical costs to determine the right coverage amount for your needs.

Is critical illness insurance tax deductible in Canada?

Critical illness insurance premiums are generally not tax-deductible for individuals when purchased for personal use. Since the benefit is paid out as a lump sum and is typically tax-free, the Canada Revenue Agency (CRA) does not allow individuals to deduct premiums as a medical expense.

However, if a business purchases a critical illness policy for an employee, the tax treatment can vary. In some cases, premiums paid by an employer may be considered a taxable benefit for the employee.

Who offers the best critical illness coverage in Canada?

Although the best critical illness insurance company can depend solely on the specific needs of an individual compared to the offerings of various providers, some of the most prominent names in Canada include Canada Life, Sun Life, Manulife, Desjardins, and RBC.

• Canada Life: Offers flexible term and permanent coverage with customizable benefits and lump-sum payouts for medical and recovery expenses
• Sun Life: Covers up to 26 illnesses, providing tax-free lump-sum payments and optional return-of-premium benefits for added financial security
• Manulife: Provides coverage for up to 24 illnesses, along with second medical opinions and flexible payout options for comprehensive protection
• RBC Insurance: Offers up to $2 million in coverage with critical illness and long-term care benefits to ensure financial stability during recovery
• Desjardins: Covers up to 26 conditions, with partial payouts for early-stage diagnoses and wellness support services for a holistic approach

How to reduce the cost of critical illness insurance in Canada?

Reducing the cost of critical illness insurance in Canada involves several options which include buying insurance at a younger age, choosing a higher deductible, considering policy riders, and limiting your coverage amount. These strategies can help lower your premiums without sacrificing essential coverage. 

• Buy at a younger age: Premiums tend to be lower when you’re younger and in better health. The sooner you purchase coverage, the more affordable it will likely be.
• Choose a higher deductible: Opting for a higher deductible can reduce your premiums. However, ensure you’re comfortable with the out-of-pocket expenses in the event of a claim.
• Consider policy riders: Some insurance providers offer the option to add critical illness coverage as a rider to a life insurance policy. This can be more cost-effective than purchasing a standalone critical illness policy.
• Limit coverage amount: If you don’t need extensive coverage, consider opting for a lower coverage amount. This can help you save on premiums while still providing essential protection.
• Shop around: Different insurers offer varying rates for similar coverage. Compare policies from multiple providers to find the best deal that meets your needs.
• Maintain a healthy lifestyle: Insurers may offer better rates to those with good health. Maintaining a healthy weight, not smoking, and exercising regularly can improve your eligibility for lower premiums.
• Opt for limited coverage: Some policies offer limited-term coverage (e.g., coverage for a specific number of years), which can lower premiums compared to lifetime coverage.
• Review and update your policy regularly: As your life circumstances change, such as becoming debt-free or experiencing a decrease in financial responsibilities, you can review your policy and adjust your coverage to reflect your current needs

How to find the best critical illness insurance rates in Canada?

Searching for the best critical illness quotes in Canada can indeed be daunting. Comparing several plans to choose one that suits your needs the best can be hectic, especially if you lack extensive industry knowledge. This is exactly where PolicyAdvisor comes in.

Our team of expert advisors can take you through all your options based on your budget and lifestyle choices. Moreover, through PolicyAdvisor, you can access lifetime after-sales support in case you run into any problem or have queries about your plan at a later point of time! Book a call with us today and make sure you’re fully prepared when a health crisis hits your life!