Should my child have critical illness insurance?

by | Feb 26, 2024 | Financial Tips | 0 comments

As a parent or grandparent, you’re always looking toward the future and doing your best to plan well so your child has the best chance at a healthy and happy life. You can prepare insurance plans in case of your own illness or inability to work, but what about if your child becomes ill? 

In this blog we explain what child critical illness insurance can look like, and whether or not it’s the right choice for your family.

What support do you already have in place?

The Canadian government offers Family Caregiver benefits through Employment Insurance (EI) to care for a family member who is critically ill. These benefits provide 35 weeks of financial assistance, with the possibility of 55% of your earnings up to $668 a week. For some cases of illness, this benefit will be sufficient support for you and your family. 

However, if you are self-employed or a contract worker, you may not pay into EI. Whether you have EI or not, if you would like additional financial support and the possibility of longer-term support, critical illness insurance may be beneficial for you.

What is child critical illness insurance?

Critical illness insurance pays a tax-free, lump sum amount if your child is diagnosed with one of the covered illnesses. Having child critical illness insurance can help fill the gap of lost income if one or both parents need to take time off work. You may also need to use the funds for uncovered treatments or accessibility changes to your home.

Sun Life Child Critical Illness insurance covers the following range of illnesses:

child critical illness insurance

  • life-threatening cancer
  • stroke
  • acquired brain injury
  • major organ failure

It also covers five childhood illnesses up to age 24:

  • type 1 diabetes mellitus
  • cystic fibrosis
  • congenital heart disease
  • cerebral palsy
  • muscular dystrophy

Desjardins offers a similar product but also includes coverage for autism spectrum disorder and Rett syndrome.

What are the benefits?

When dealing with long-term illness, there are many costs that can add up, which are not covered by provincial or private health coverage. These include incidental medical expenses, and non-medical expenses like hospital parking, taxis, or hotel accommodations for out-of-town specialist visits. Child Critical Illness Insurance provides financial support in these areas.

Premiums are low and guaranteed, and that coverage continues into adulthood. So, rather than applying for critical illness insurance as an adult with a higher rate, your child can keep their lower rate and continue receiving coverage as an adult if no claims are made.

What happens if you never make a claim?

The short answer: some insurers will return a percentage of your premiums if no claims are made. One of Sun Life’s return-of-premium options will return 75% of premiums paid when your child turns 25, or on the policy’s 15th anniversary (whichever is later).

Similarly, Desjardins will return a percentage of premiums if no claims are made. The percentage depends on the number of years your policy has been in force. Learn more here.

What comes next?

Have questions, and want to better understand your options? Reach out to us at ACN Financial Group. We’d be happy to discuss what options would be best for you and your family.