Find out why they got insurance

“If it happened to me, I'd want to be able to focus
completely on getting better.”

Close to
1 in 2 Canadians

will be diagnosed with a critical illness like cancer during their lifetime1.

Cancer is the most common critical illness claim.

The second?
Heart disease2.

Critical illness claims – % paid

Proportion of insurance claims paid for main critical illnesses in descending order, according to Munich Re’s 2010 Individual Insurance Survey; Cancer: 68%, Heart attack: 13%, Stroke: 5, Coronary bypass: 4, Multiple sclerosis: 3, Other conditions 7%.
 Cancer68%
 Heart attack13%
 Stroke5%
 Coronary bypass4%
 Multiple sclerosis3%
 Other conditions7%

Every 3 minutes in Canada, someone will be diagnosed with cancer3.

Every 7 minutes in Canada, someone has a heart attack4.

Luckily, these days, a critical illness diagnosis isn't the end of the story:

Over
6 in 10 people

live 5 years or more after receiving a cancer diagnosis5.

The cardiovascular death rate in Canada has declined by more than 75% since 19526.

What has made the difference?

Research

Prevention

Optimized care

What’s the financial impact of a critical illness?

See the answer
A
Little financial impact, the government covers almost everything.
B
About $1,000, to pay for drugs that aren't covered.
C
Almost $10,000, the cost of a trip to Europe.
D
$50,000 or more, the cost of a sailboat.

Do you know the hidden costs of a critical illness?

  • Loss of income for people who don't have disability or critical illness insurance. A critical illness requires a lot of care, and the person often needs to take time off work to focus on recovery.
  • Drugs not covered. You might have to pay a certain amount for drugs that aren't totally covered by your insurance or by public plans. And you might have to pay 100% for some drugs.
  • Specialized care and services not covered. For example, a homecare nurse costs between $50 and $75 an hour. Some experimental care or treatments available outside the country may not be covered by the government.
  • Expenses incurred by loved ones who will go with you to treatments: parking, loss of income, financial support, etc.

In the event of critical illness

  • If you have group insurance, you might have critical illness coverage and could receive a lump-sum payment in the event you're diagnosed with an illness covered in your contract (e.g., $10,000). If not, disability insurance coverage is offered under most plans, which could offset the loss of income if you had to stop working (e.g., 70% of your salary).
  • If you have individual critical illness insurance, check your contract to find out the provisions.
  • Not covered? See The A to Z of Critical Illness Insurance - This link will open in a new window..

You don't need to take out coverage if you have enough savings to cover the expenses related to a critical illness. Here are some other possibilities:

  • Use your savings, like non-registered investments or your TFSA. If you have to take money out of your RRSP before you retire, you'll need to consider the tax impact and might have to postpone retirement.
  • Take out a loan. This might be a better solution than taking money out of your RRSP.
  • Sell some real estate. You'll need to consider the financial repercussions, like loss of rental income. You'll also need to think about how long it will take to sell.
  • Turn to loved ones for financial support.

Advice for reducing the risk of critical illness

  1. Based on a 45% cancer rate and 35% heart disease rate, “close to 1 in 2 Canadians” is a conservative estimate.
    Source: Cancer statistics at a glance - This link will open in a new window., Canadian Cancer Society.
  2. Source: Canadian Institute of Actuaries - This link will open in a new window., July 2012.
  3. Source: Statistics and risk factors - This link will open in a new window., Cancer Research Society.
  4. Source: Statistics - This link will open in a new window. Heart and Stroke Foundation
  5. Source:Cancer survival rates - This link will open in a new window., Cancer Research Society. Statistics may vary depending on the type of cancer, age and sex.
  6. Source: Statistics - This link will open in a new window. Heart and Stroke Foundation
  7. Source: Financial Hardship of Cancer in Canada: A Call for Action - This link will open in a new window.
  8. Source: Dr. Larry Chambers, head researcher of study financed by the Cardiovascular Health Awareness Program (CHAP).
  9. Source: Moving Ahead: The Economic Impact of Reducing Physical Inactivity and Sedentary Behaviour, Conference Board of Canada - This link will open in a new window., October 24, 2014.

“I realized that a broken bone could prevent me
from paying my bills.”

What is disability?

According to the Canadian Life and Health Insurance Association (CLHIA), “a disability—whether it’s sudden or because of a degenerative condition—can rob you of your ability to earn a living. Disability insurance is a type of coverage that gives you protection against the chance of losing income if you become disabled and you are not able to pay your expenses.”

More than
half of employees

report that it would be difficult to meet their financial obligations if their pay cheque was delayed by a single week1.

For many people, being without income for a few weeks would have a major financial impact.

And it doesn’t just happen to others:

one in 3 working canadians

will experience a period of disability lasting longer than 90 days during their working lives2.

In 2012, an estimated 3.8 million adult Canadians reported being limited in their daily activities due to a disability in 2012. This represents 13.7% of the adult population3.

The average age of someone who develops a disability is 464.

Close to 50% of mortgage foreclosures are due to disability5.

What causes a disability?

A disability can result from a number of situations or events, including:

  • Musculoskeletal system diseases (e.g., rheumatoid arthritis)
  • Depression or burnout (mental and nervous disorders)
  • Injury from a fall
  • Workplace or auto accident
  • Cancer

Distribution of claims by cause of disability6

Number of claims by cause of disability in descending order. Each cause of disability is followed by the number of events and percentage of events; Mental and nervous disorders. Events: 126,057 or 36%., Musculoskeletal system diseases. Events: 75,892 or 22 %, Neoplasms (primarily cancers). Events: 37,782 or 11%, Accidents. Events: 31,546 or 9%, Not indicated or unknown. Events: 12,249 or 4%, All other undetermined causes. Events: 65,838 or 19%. Total disability claims from all causes: 349,374.
Color in the graphiqueCause of disabilityNumber of eventsPercentage of events
 Mental and nervous disorders126,05736%
 Musculoskeletal system diseases75,89222%
 Neoplasms (Primarily cancer)37,78211%
 Accidents31,5469%
 Not indicated of unknow12,2494%
 All other undetermined causes65,83819%
 Total349,374100%

What loss of income is associated with a 90-day
disability for an average income earner in Canada?

See the answer
A
$12,220 before taxes
B
$8,500 before taxes
C
$20,125 before taxes
D
$5,615 before taxes

In the event of disability

  • You might have individual disability coverage or coverage through your employer. If so, check your policy or contract to find out:
    • The percentage of your salary that would be paid in the event of disability
    • The waiting period
    • How long benefits would be paid
  • You might be eligible for government benefits7. You might be able to receive benefits under government plans like worker’s compensation, employment insurance (EI) or the Régime de rentes du Québec [RRQ]. Contact these organizations to find out their eligibility criteria.

Here are some of the questions you might want to ask your life and health insurance representative:

  • What percentage of my income would I receive? Is there a maximum?
  • Is there a waiting period?
  • Are there any restrictions or exclusions?
  • How long will benefits be paid?
  • Are benefits taxable?

Learn Why purchase disability insurance? - This link will open in a new window..

Advice for reducing the risk of disability

A disability can happen at any time and to anyone.
You can't stop living, but you canstill stack the odds in your favour!

If you do sports
Take some basic steps to prevent injury. It could even improve your performance!

At work
Follow workplace safety procedures. They're there to protect you!

In life in general
Take the time to relax—it's good for your mental health!

  1. Source: Press release issued by the Canadian Payroll Association, September 10, 2014.
  2. Source: Statistics Canada, Commissioners Disability Table A.
  3. Source: Disability in Canada: Initial findings from the Canadian Survey on Disability, Statistics Canada, December 3, 2013.
  4. Source: Canadian Institute of Actuaries, 2011.
  5. Source: Why Disability, National Underwriter.
  6. Source: Group Long-term Disability Termination Study, Canadian Institute of Actuaries, October 2011.
  7. Source: A Guide to Disability Insurance, Canadian Life and Health Insurance Association.

“I don't want to bring such a burden to my family if
this were to happen to me.”

The risk of loss of independence

The risk of loss of independence increases with age. The main contributors are1:

  1. Alzheimer's disease
  2. Circulatory disorders (e.g., heart attack)
  3. Injury (e.g., broken hip)
  4. Stroke
  5. Cancer

Health care claims by diagnosis

Proportion of claims by primary cause of loss of independence, in descending order. Alzheimer's: 17%. Injury: 15%. Cancer: 15%. Stroke: 11%. Circulatory: 11%. Arthritis: 10%. Nervous system: 6%. Respiratory: 4%. Digestive system: 2%. Mental: 1%. Other: 8%.
 Alzheimer's17%
 Injury15%
 Cancer15%
 Stroke11%
 circulatory11%
 Arthritis10%
 Nervous system6%
 Respiratory4%
 Digestive system2%
 Mental1%
 Other8%

Did you know? 2

In 2001, 12.6% of the Canadian population was 65 or older?

In 2041, this group will make up 25% of the population?

The aging population is mainly due to increased life expectancy and a lower birth rate:

Life expectancy at birth3 in Quebec

What exactly is loss of independence?

Loss of independence is when someone has difficulty performing the activities of daily living, like preparing meals, dressing or washing. Over time, as their level of dependence increases, they begin to need constant assistance to perform everyday tasks

According to the definition typically used by insurers, a person is suffering a loss of independence if:

  • They're completely unable to perform at least 2 of the following 6 activities of daily living by themselves: bathing, dressing, toileting, bladder and bowel continence, transferring and feeding

    or

  • They have a cognitive impairment that endangers their safety or security

Loss of independence can occur at any age, but the risk is higher for seniors.

What percentage of Canadians with Alzheimer's disease are women?

See the answer
A
45%
B
25%
C
72%
D
59%

In the event of loss of independence

  • Specialized care and services not covered. For example, a homecare nurse costs between $50 and $75 an hour. Some experimental care or treatments available outside the country may not be covered by the government.
  • Housing: You might have to move into a public or private establishment that offers various services. The cost of living in a nursing home or long-term care centre can be more than $2,500 a month. And private establishments can cost between $3,000 and $8,000 a month if additional care and services (e.g., household maintenance, personal care, meal preparation) are provided.
  • Drugs not covered. You might have to pay a certain amount for drugs that aren’t totally covered by your provincial health plan.
  • Dip into your savings (TFSA, non-registered savings, RRSP, RRIF)
    • Your life and health insurance representative can estimate the impact of any unanticipated withdrawals from your retirement portfolio.
  • Turn to loved ones for financial support
    • It can be gratifying to help a loved one, but not everyone has this option.
  • Apply for disability benefits
    • Disability insurance should cover a loss of independence before age 65, after which it no longer applies because it’s designed to replace income. So it’s a good option for workers, but it doesn’t cover the period where loss of income most frequently occurs, which is after age 65.
  • Take out loss of independence insurance

A few tips to prevent the loss of independence

  1. Eating well: a healthy diet reduces the effects of aging on intellectual functioning. For example, it can delay the onset of Alzheimer's disease and even diminish existing symptoms.
  2. Walking: walking improves cardiovascular health, endurance and balance. Reignite your heart health motivation with the Heart & Stroke Foundation's <30 Days app - External link. This link will open in a new window..
  3. Monitoring your health: certain studies show that controlling one's hypertension can reduce the risk of dementia by 50%. Control your blood pressure - External link. This link will open in a new window.
  4. Volunteering: If you live close to a community centre or a non-profit organization, offer your help! This will enable you to develop social relationships while making a difference in your community.
  1. Source: Long Term Care Experience Committee, Intercompany study, 1984–1999
  2. Source: Growing Up: The Social and Economic Implications of an Aging Population, Chartered Professional Accountants of Canada, 2005.
  3. Source: Coup d'œil sociodémographique, Institut de la statistique du Québec.

“What would become of my family if something had
happened to me?”

At the end of 2013, 21 million Canadians owned $4.1 trillion of life insurance1!

$309,400: The average size of new individual policies.

People take out life insurance for many reasons. What do you
think the main one is?

See the answer
A
Cover taxes at time of death
B
Ensure the financial security of their family in the event of premature death
C
Leave a bigger inheritance for loved ones
D
Invest funds tax-free

In the event of Death

The advantage of life insurance is that the beneficiary nearly always receives the sum insured tax-free. The benefit can be used to pay for:

  • Funeral expenses
  • Notary and executor
  • Taxes owing on death: most of the insured's assets are deemed to have been sold or cashed in before their death and taxes can then be paid
  • The insured's debts (e.g., personal loans)
  • Children's education
  • Loss of income

Life insurance needs vary according to many factors, including what stage of life you're at. Your life and health insurance representative can help you determine the coverage that's right for you, based on your needs and budget. See the three steps to take - This link will open in a new window..

How is the premium calculated?

For an insurer, the price of the insurance depends on the risk involved. The lower the risk, the lower the premium.

To assess the risk, the insurer takes many factors into account, including:

  • Age
  • Sex
  • Medical history
  • Health condition

Rates are lower for non-smokers and for women.

According to the Canadian Life and Health Association (CLHIA), about 96% of people who apply for life insurance get the coverage they want.

When you apply for life insurance, be sure to answer all the questions on the application honestly. If any information is missing or inaccurate, the policy could be cancelled.

  1. Source: Canadian Life and Health Insurance Facts, 2014. CLHIA.