65 per cent of Canadians lack coverage, experts say

By KIM COVERT, Postmedia News November 21, 2011

In much the same way that you don’t know what you’ve got till it’s gone, quite often you never think about what you might need until you need it.

When it comes to insurance, in particular, it’s quite often in hindsight that we realize how handy it would be.

The majority of Canadian parents with kids at home, 65 per cent, don’t have critical illness insurance, says Dave Minor, vice-president, TD Insurance.

"It’s not that people are making a conscious decision not to get it so much as it is that many people, young families especially, just haven’t really thought about it," said Minor.

As well, critical illness insurance doesn’t have a particularly high profile in Canada, said Minor, and many people have access to other kinds of protection against a disruption in income, such as short-or long-term disability plans through work.

Canadians without any of those types of coverage have to rely on their savings if a major illness sidelines the family wage-earner, and that can be problematic.

"So many households are relying on every dollar of income that comes in and if that does get interrupted or impaired because somebody suffered a heart attack or a stroke or is diagnosed with cancer and has to take some time off work for treatment or rest or whatever, all of a sudden it’s really difficult to meet the bills each month," said Minor.

Beverly Beuer mann-King, a stress and wellness expert, says it often comes as a shock to Canadians, who are used to thinking of their health-care as free, just how much of the cost of dealing with a critical illness has to come out of their own pockets.

It’s not just lost income because someone is unable to work, "but there’s going to be things such as driving to appointments, there’s going to be extra gas, there’s going to be extra time. You may have to hire somebody to do that driving if other family members are working trying to pay the bills and there’s nobody available to do that,"she said. Some necessary treatments and drugs or health supplements may not be covered under medical plans, and then there are meals and accommodations if you have to travel to appointments.

"We assume that many things are covered and they’re not covered," she said, not just in the national health-care system, but when it comes to private medical insurance as well. She advises people to make sure they know what they’re covered for - and to study their family’s medical history for clues as to what kind of coverage they’re likely to need.

Critical illness insurance policies are inclusionary - they cover specific illnesses. Minor says TD’s basic critical illness policy covers the big three: cancer, heart attack and stroke, though there are policies that cover up to 22 or 24 conditions.

"Cancer, heart attack and stroke, for most people that covers ... probably 80 to 90 per cent of the common critical illnesses that people suffer from. So if you shop around a bit you’ll see that many of the insurers who offer critical illness now offer a simplified offering of just three or four coverages, and then some offer the more complicated offering," he said, noting that the more that’s covered, the more expensive the policy becomes.

Critical illness and long-term disability policies are not interchangeable, he adds. While an LTD policy may have a broader range of coverage, it usually won’t cover 100 per cent of lost income, he said. A critical illness policy usually pays out in a lump sum, or covers the balance on your mortgage or line of credit. © Copyright (c) The Montreal Gazette