Critical illness: The financial impacts of your survival

Issue: BCMJ, Vol. 58, No. 2, March 2016, page(s) 92-93 Pulsimeter
Claire Campion Wright, BSc, Laura McLean

Life expectancy in Canada is on the rise. Those born in 1920 could expect to live for 60 years, on average; this had increased to 80 years for those born in 2000. Canadians now survive previously fatal conditions, but survival often comes with a cost. During recovery from critical illness you may see your financial obligations increase, while your income decreases if you take time off work.

The top three causes of death in Canada, according to Statistics Canada, are cancer, heart disease, and stroke, but medical advances mean that people are living longer after diagnosis. The Heart and Stroke Foundation notes that there are roughly 70 000 heart attacks in Canada each year, and an estimated 62 000 stroke and TIA patients admitted to Canadian emergency departments. Some 105 000 of these people survive and join the more than 1.3 million Canadians living with health impacts from heart disease or stroke.

If you were diagnosed with a critical illness would you have the financial freedom to attend to your health? The average hospital stay after a stroke is 16.1 days. This is a loss of work time and the beginning of an often a lifelong recovery. Cancer diagnosis can bring increased costs for medication, child care, housekeeping, and accommodation if you must travel for treatment. Your spouse may also have to decrease his or her workload to help with your care, child care, and home care. This can mean that your family will face higher expenses and less income, which may impact your savings.

Critical illness insurance was developed in 1983 by Dr Marius Barnard, a South African physician. As a participant in the first successful heart transplant surgery, Dr Barnard saw how medical advances were improving patient survival. He also saw that survivors often suffered financially due to their illness.

Critical illness plans cover a set number of conditions including cancer, heart attack and stroke, Alzheimer disease, Parkinson disease, coronary bypass surgery, and kidney failure. After you survive the waiting period (usually 30 days from your diagnosis), you are entitled to your full critical illness benefit. This tax-free lump sum is yours to spend. You may decide to make home modifications such as adding a shower rail, pay for medications, ask your spouse to take time off work to care for you, or focus on your emotional well-being with a vacation.

Although the conditions covered by critical illness insurance are more likely to occur as you age, it is important to think about coverage while you are young. The younger you are the more likely you are to be approved for critical illness insurance and to benefit from it because you are less likely have pre-existing conditions and more likely to survive an illness.

You may already carry disability insurance. Critical illness insurance supplements do not replace disability coverage. While disability insurance pays a monthly amount if you are disabled from work, to allow you to maintain ongoing expenses such as a mortgage and car payments, critical illness insurance pays a lump sum regardless of you continuing to work. This benefit is useful for the extra costs arising from your illness and will help protect your savings and your family’s financial security during a difficult time.
—Claire Campion Wright, BSc
UBC Medicine, Class of 2016
—Laura McLean
Insurance Client Service Administrator