Nobody ever wants to be critically ill. Because the potential of developing an illness is impossible to eradicate, it’s vital that we take precautions.
Only then, you are able to make the financial judgments of the highest importance when it actually matters. And that is the reason why there are over half a million critical illness plans active in Canada.
Life-and-death conditions are just the tip of the iceberg. Even when one survives longer than the elimination period, the insurer may delay the payout to check the claim’s credibility. One of the practices, for example, is the confirmation of the fact that the insured was unaware of the illness at the time of the initial application.
The latest news is that a few Critical Illness insurance providers in Canada present an automatic increase benefit rider. It allows the client to automatically increase their critical illness benefit at regular dates. These automatic increases also mean that the premiums according to the percentage of each scheduled increase.
RBC Insurance, for example, offers its clients an Automatic Increase Benefit Rider, which allows the customer to raise her or his plan benefit each other year.
What is more, on each of the first five increases, the customer can top up their total benefit without providing fresh proof of his or her insurability. The maximum increase amount is going to be equal to 20% of the original benefit. This means that clients can increase their coverage to 200% within a decade.
Be aware that when we say that the RBC increases to the critical illness benefit are automatic, it means that they may not be rescheduled or suspended. If the insured contests an increase, the add-on terminates. Yet, past increases and related premium increases will remain in effect.
Unrelated to coverage increases, Canada Life draws a distinction between cigar and pipe smokers when underwriting in that it classes cigar smokers and pipe smokers as non-smokers for the purposes of critical illness and disability policies. This will have a large impact on the final policy cost.
Further reading: How Equitable Life reworked Critical Illness Plan for our youngest.
Prepared by Lorne S. Marr, an insurance specialist and an expert on Canadian life insurance. Lorne works with more than 12 Canadian insurance companies.
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