We know that critical illness insurance offers financial support if you’re diagnosed with a critical condition. But there’s a lot that happens before you can receive that payout.

To decide if critical illness insurance is for you and to make the most of your coverage, it’s important to understand how it works.

Here’s a step-by-step breakdown of critical illness insurance in Canada.

1. Apply for and purchase a critical illness insurance plan

The first step with critical illness insurance is to find a plan that fits your needs. Before you start shopping around, you’ll need to decide a few important things:

• Plan length: This is how long you want to be covered for. You’ll often see policies with coverage lengths or terms ranging from 10 to 30 years. At the end of your plan, you can typically renew or purchase a new plan. However, some insurers have age limits for coverage.
• Coverage amount: This is how much you’ll receive if you’re diagnosed with a covered illness and meet the terms of your plan. It’s common to see coverage anywhere from $10,000 to $1 million. How much coverage you want or need will usually depend on your income and financial responsibilities. But a good rule of thumb is to cover at least six months of income.
• Covered conditions: These are the critical illnesses that would be covered by your plan. Not all critical illness insurance policies are equal. Every insurance company will have their own list of conditions. Some insurers may also offer different tiers of coverage. While this means you may not be covered for as many conditions, it can help you save by only choosing the coverage that’s important to you.

You may also be required to answer questions about your medical history or complete a medical exam—although this isn’t always the case.

2. Pay your premiums

Once you’re approved for coverage and sign off on your plan, you’ll pay what are known as premiums to your insurance company. You’ll need to stay on top of them to keep your plan active.

These fixed monthly (or yearly) payments are determined when you buy your plan. Everyone’s premiums will look a bit different, depending on your coverage, age, health factors, and more—but more on that below.

With critical illness insurance, your premiums will stay level throughout the entire term. This means you’ll make the same monthly or yearly payments until your plan expires, which makes budgeting for critical illness insurance a breeze.

3. Submit a claim

If you’re fortunate enough to never experience a critical illness during the term of your critical illness insurance plan, it will simply expire, and your coverage will come to an end. If you still want to be insured, you can renew or purchase new coverage depending on your needs.

On the other hand, if you’re diagnosed with a covered condition during the term of your plan, you’ll be able to file a claim. Once you provide the information needed to your insurance company, this will kick off the process of reviewing your claim and securing your living benefit.

4. Meet the plan requirements and survival period

When it comes to making a claim against your critical illness insurance plan, there will usually be some requirements and conditions you have to meet before it can be approved. One common requirement you’ll find is what’s known as a survival period or waiting period.

The survival period or waiting period is how long you need to wait after being diagnosed with an illness before you can file a claim to receive your critical illness insurance payout.

For example, with CAA Critical Illness Insurance, provided by Securian Canada, there’s no waiting period for 25 of the 44 covered conditions, so you’re able to submit a claim right away. The remaining covered illnesses have a short waiting period. For example, with cardiac conditions, there’s a 30-day waiting period before you can file your claim.

Critical illness insurance policies can be very specific, and every plan is different. So, when purchasing your plan, it’s important to have a clear understanding of any exclusions or limitations. If you need support understanding your options, a licensed insurance advisor is always a great resource.

5. Receive your living benefit

If your condition is covered and you meet the terms of your plan, you’ll receive your tax-free lump-sum payout.

Despite being tied to a diagnosis, there aren’t any restrictions for how you can use your living benefit. From covering lost income and paying for childcare to paying medical bills or anything else that will help reduce stress during this challenging time, the choice is yours.

Keep in mind that critical illness insurance only provides a one-time payout. So, once you make a claim that’s approved and you receive your living benefit, your coverage will come to an end.

Get CAA Critical Illness Insurance

CAA Critical Illness Insurance provided by Securian Canada is a great option to give you the coverage you need. Plus, if you’re a CAA Member, you’ll receive exclusive Member pricing. Learn more about this option on our website, and reach out to get a quote started today.