Many people recognize the need for Critical Illness insurance to protect them from the financial risk that could result if diagnosed with a life threatening illness. Although a difficult subject to think about, children should also be protected from this risk as well. If our children were to become ill the emotional and financial toll it could have on the family may equal that of the parent.
Juvenile Critical Illness provides options:
- To find and provide the best treatment and care for your child. Often, treatment can be very expensive, especially if the best available is outside of Canada. Most parents would not spare any expense of this nature when it comes to their children and having tax free funds for this purpose could be life-saving;
- Having financial resources would allow parents to take time away from work to be where they are needed most – with their child. Also, these illnesses often require necessary equipment, specialized care and medicine which might not be covered under a provincial medical plan;
- Reduces the stress on the parent of dealing with the normal financial concerns during this time allowing them to focus their efforts on their child’s recovery;
- Guarantees the child’s future insurability. Should an illness strike later in life the child has coverage in place lessening the blow to the adult child.
Specifically designed for childhood illnesses
In addition to the approximately 20 standard illnesses covered in critical illness policies, some insurance companies have made available Critical Illness policies that are designed specifically for juveniles by including in the insured conditions these five illnesses:
- Cerebral Palsy
- Congenital Heart Disease
- Cystic Fibrosis
- Muscular Dystrophy
- Type 1 Diabetes Mellitus
Not all insurance companies offer Juvenile Critical Illness coverage and those that do, provide them in different ways. Some, such as Canada Life, offer a policy which provides all the standard CI covered illnesses PLUS the five childhood illnesses (as shown above) until age 25 when the policy expires. The coverage can be converted, however, to an adult policy prior to expiry without medical evidence. Other companies, such as Sun Life offer a CI policy for children where the covered childhood conditions fall off at age 24 and the coverage simply continues as an adult policy.
Features of a Juvenile Critical Illness Policy
- Typically offered between the ages of 60 days and 17 years in amounts from $10,000 to $250,000.
- Optional benefits, such as return of premiums paid in the event of the death of the insured are available.
- Another optional benefit that is becoming very popular is the return of premiums paid in the event of cancellation or expiry. Depending on the carrier, up to 100% of all premiums paid would be refunded at age 25.
- In the case of Sun Life, since their policy continues past the age of 25, a 75% refund is automatically paid at the later of age 25 or 15 years. Remaining returnable premiums would be paid on the cancellation of the policy at the later of age 40 or the 30th policy anniversary or on the policy expiry date (e.g. age 75). Certain conditions apply in all of the return of premium provisions. The refund could be used for any purpose whatsoever including the following:
- Reimbursing the parent for premiums paid;
- Prepaying premiums on the continued or converted adult policy;
- University or other educational expenses;
- Contributing to the down payment for the child’s home.
Juvenile Critical Illness Insurance should be considered as a valuable component of the insurance and financial planning for most families. Combining the coverage with optional riders such as the Return of Premium on Cancellation/Expiry can also create a financial benefit in addition to the peace of mind provided by the basic policy.
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