In addition to the critical illness standard covered conditions, most policies contain a variety of contract provisions. We describe some of the more common ones in this article.
1) 90 day moratorium – this clause indicates that cancer is not covered for the first 90 days after you purchase your policy. The exact definition of when the 90 days starts is noted in your policy, but the effect is that if you develop cancer, are diagnosed with cancer or even have symptoms of cancer within the first 90 days of your policy, you are not covered.
2) Partial benefits – four conditions (Early prostate cancer, ductal breast cancer, superficial malignant melanoma, and angioplasty) are not covered for full benefits. However many policies will pay a minimal partial benefit for these conditions. e.g. some companies may pay 10% to a maximum of $25000 for these conditions. Any such benefit payment would reduce your coverage amount for any other benefit. Companies call this benefit a variety of names such as early diagnosis benefit or early intervention benefit.
3) You normally need to report a claim within 6 months of diagnosis. Failure to do so would result in denial of your claim.
4) Survival period – you must survive 30 days from your date of diagnosis. Insureds who die within the 30 days (i.e. if you die from the covered condition in the first 30 days) then no claim will be paid.
5) Termination – critical illness policies pay only once. After a claim has been paid, your policy is automatically terminated.
6) Renewability – if your policy has term premiums (i.e. 10 year term or 20 year term) then the policy will automatically renew at the end of the term. These policies have a final renewal date after which point the policy is no longer renewable and is terminated. For example a policy may be guaranteed renewable every 10 years until age 75. Premiums will increase at each renewal. However unlike life insurance policies where the premiums at renewal are exhorbitant, many critical illness polices in Canada actually have renewal premiums that are affordable. Thus you may actually decide to keep a critical illness policy at renewal.
7) Conversion – some polices allow you to exchange your critical illness policy for a long term care policy, without a medical exam. This option is detailed in our critical illness quotes.
8) Out of county diagnosis – If you are diagnosed or treated outside of Canada, critical illness policies have a clause that requires the insurer to be able to accurately access information about your condition, diagnosis and tests, to standards that would be found in Canada. Please see your policy for the exact wording of this clause.
9) Critical illness polices exclude coverage for conditions resulting from a variety of conditions including self-inflicted injuries, criminal offences, and drug or alcohol useage.
There may be other clauses that apply to you. As always, it’s important for you to actually read your policy before purchasing. We do have access to sample contracts prior to purchase, for our clients.