Critical Illness Insurance Developments And Trends In Canada
- Part 1 by Mike Armstrong

Critical illness insurance may be considered as a new form of insurance in Canada. Critical illness cover first made its apparition in Canada during the year 1993. Canadians may have been slow to adopt critical illness cover. Thus, sales may have been minimal since introduction. But during the last two years critical illness sales may have been noted to make an ascent.

Furthermore, banks may have started to enter the market thus offering creditor critical illness. For example on mortgage, loans and credit cards. Banks believe that creditor critical illness may become a high source of income for them. Additionally, more than 40 percent of critical illness policies still ongoing may have been taken out during the year 1999. This increase is expected to continue as more companies, banks and insurers may be starting to enter the insurance market. Also, the awareness of critical illness among people may have started to broaden.

Moreover, the group market in Canada may be rising. This segment of the Canadian insurance market is believed to make progress in the coming years. The importance of critical illness cover in Canada is turning out to be higher. The reasons may be Canada’s ageing population and expensive healthcare costs. Additionally, at the beginning, critical illness insurance may have been introduced as a standalone cover. Gradually, it became the rider of disability and life insurance. At present, insurers may be finding new alternatives to enhance the design of critical illness cover and at the same time to make it more effective. As a result, insurers may be trying to accelerate the benefits of a life insurance upon diagnosis of a critical illness. On the other hand, other insurers may be diminishing the benefits from critical illness covers that have guaranteed premiums.

Insurers may as well use the Return of Premium (ROP) benefits on critical illness cover as an aid to compete appropriately in the market. In Canada, many critical illness policies may have the ROP built in or even offered as a rider. Other insurers may also offer the ROP as a maturity benefit refunding the premiums paid in case there was no critical illness claim. Alternatively, other companies may have also added the ROP on lapse option in their policies. This option may allow the insured to stop the cover, for example, after ten years and then receive a return of nearly all the premiums contributed. Even that this option might seem to be an advantage, some people might argue that the company may be in fact encouraging people to terminate their critical illness cover prematurely.

In fact, the most promising development may have been the creditor critical illness insurance, especially critical illness with mortgage cover. Creditor insurance may have been brought in Canada in the year 1997. So, during the past couple of years encouraging evolution in this sector may have been noted. Thus by the end of the year 2000, creditor critical illness insurance may have reached a sum of around CanD 12 million in terms of premiums. This amount may have represented a 100 percent increase since 1997.
About the Author

Critical illness insurance protects yourself or your family. For more information about critical illness insurance please visit http://www.unbeatablelifeandcriticalinsurance.co.uk.

Articles from November 2007
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