Four questions. Answer them in your head before you read the numbers.
What are the chances something major happens to your house this year?
What are the chances you’re in a serious car accident?
What are the chances of dying before sixty-five, if you’re forty now?
And what are the chances of a critical illness before sixty-five?
Most people rank those roughly in that order, worst to least. Which is right. What surprises people is the size of the gaps.
House, around one in twelve hundred a year. Serious car accident, roughly one in two hundred and seventy. Dying before sixty-five, about one in ninety-eight for a forty-year-old.
Critical illness before sixty-five sits at about one in three.
You almost certainly have cover for the first two. Quite likely the third. The fourth is the one most people are carrying entirely themselves, and it’s the one that’s not really a maybe.
The thing that changed
Dr. Marius Barnard was a cardiac surgeon. He designed critical illness cover after watching something happen over and over in his own follow-up clinics.
His patients survived. The surgery worked. And then they lost the house.
He put it better than we can: you need insurance not only because you are going to die, but because you are going to live.
That’s the shift, and it happened quietly over about forty years. Cancer, heart attack and stroke used to be mostly about death. Now they’re mostly about survival. Roughly sixty-two percent of people diagnosed with cancer survive it. Eighty-two percent survive a first heart attack. Around seventy-five percent survive a first stroke.
Good news, obviously. It also moved the financial problem.
Life insurance answers a death. It has nothing to say about the eighteen months where you’re alive, not working, and everything still costs what it cost.
What surviving actually costs
Here’s what we see on files.
Somebody takes time off. Then their spouse takes time off, because somebody has to drive to appointments. That’s two incomes, not one.
The mortgage carries on. The lease on the practice carries on. Staff still get paid, because you’d like a practice to come back to.
Then there’s the stuff nobody budgets. Drugs that aren’t covered. A treatment that’s available somewhere else and not here. Travel, lodging, food, while you’re not earning. Someone to help at home. A vehicle or a bathroom that needs changing.
None of that is exotic. It’s just expensive, and it arrives in the year your income falls over.
For context on how much slack the average household has: 137,295 Canadians filed a personal bankruptcy or consumer proposal in 2024, up 11.4% on the year before. Canadian households owe roughly $1.75 for every dollar of after-tax income. That’s the starting position for most people before anything goes wrong.
What critical illness cover actually is
A lump sum, paid tax-free, if you’re diagnosed with a covered condition and you survive the waiting period, usually thirty days.
That’s it. No receipts, no claim forms for each expense, no arguing about whether a wig or a plane ticket qualifies. Money arrives, and you spend it on whatever the problem actually is.
Typical contracts cover around twenty-five conditions, and there are usually additional childhood conditions covered to a child’s twenty-fifth birthday. Some contracts pay a partial benefit for early-stage cancers and for procedures like angioplasty. Some return your premiums if you never claim.
We’re deliberately not naming a product or an insurer here. The wording is the product, and the wording differs. Two policies with the same headline can behave very differently at claim, and the definitions are where that difference lives.
The question we actually ask
When someone tells us they’d manage, we ask a version of this.
If it happened next month, what gets sold first?
RRSP. Non-registered savings. The kids’ education money. The house. A loan from the bank, if the bank’s feeling generous about lending to somebody who just stopped working. Family. Friends.
Everyone has an order. Most people have never said it out loud. Saying it out loud is usually the moment the conversation changes, because the list is always shorter than people think and it’s always in the wrong order.
Worth doing this week
Find out whether you have any critical illness cover at all. A lot of people think they do because they have disability cover, and those are different products answering different questions.
If you have group benefits, read what the critical illness portion actually is, if there is one. Group amounts are often small enough to be a gesture rather than a plan.
And if you own a corporation, ask which pocket should be paying for this, because that answer isn’t obvious and it changes the cost.
We’ve been writing coverage since 2008 and reading the corporate returns behind it since well before that. Most of the value in this particular conversation is in the contract wording, not the premium. Pull yours out. If you can’t find it, that’s an answer too.