Losing the ability to work due to an accident or illness can devastate a person’s financial situation. But it doesn’t have to: disability insurance and disability riders for life insurance offer protection that can be tailored to your specific needs. Keep reading to find out which coverage type is the best option for you.

What is disability insurance?

Disability insurance protects people from income loss if they no longer have the ability to work due to an accident, degenerative illness, or other disability. Disability insurance provides a monthly tax-free benefit payment (typically between 60-85% of your income) until you become fit to work again or the policy term ends.

What is a disability rider?

Disability riders are actually life insurance riders;  optional add-ons to your coverage. There are two key types of disability rider: a Disability Waiver Rider, which eliminates the need for premium payments should the policyholder acquire a permanent disability from an accident or illness; and an Extreme Disability Rider, which provides access to a portion of one’s life insurance death benefit in cases of total permanent disability.

Disability insurance, the pros and cons

Pros:

• Independent policy: disability insurance is purchased as a standalone policy, meaning it is not dependent on your job’s workplace benefits or your life insurance policy. In other words, you have more freedom to customize coverage and benefit terms and can rest easy knowing your coverage will follow you if you change employers or change your life insurance policy.
• Income replacement: disability insurance effectively replaces the bulk of your income if you lose the ability to work, which is critical to maintaining a stable quality of life in the event of a disabling accident or illness.

Cons:

• Stringent underwriting: similar to life insurance, disability insurance requires a thorough underwriting process to determine whether you are eligible for coverage. This includes medical evaluations to establish any pre-existing conditions that could lead to a disability claim, as well as income assessment for coverage purposes.
• Higher premiums: while premiums do vary depending on the policy holder and their coverage, monthly premiums tend to be higher for disability insurance compared to disability riders. Factors that influence premium rates are age, health, and job, as well as coverage amount and term limits.

Disability riders, the pros and cons

Pros:

• Simple: disability riders can simply be added on to a life insurance policy at time of application, meaning that you will benefit from both types of coverage without having to apply for two policies and undergo multiple underwriting processes.
• Premium protection: disability waiver riders ensure that if you lose the ability to generate income, your life insurance premiums will be covered for the duration of your policy. This is especially important for whole life insurance, as it ensures your policy will remain active as it accrues in value.

Cons

• Less flexibility: a disability rider tied to your life insurance policy will inevitably have fewer options than an individual policy in terms of coverage terms and amounts. Typically, the benefits are capped at a lower threshold than those of individual policies.
• Less protection: a disability rider like waiver of premium only covers your life insurance premiums – and nothing else; there is no income replacement. An extreme disability rider provides early access to your death benefit, but that also means less of cash will eventually go to your beneficiaries.

What to choose?

When it comes to choosing between individual disability insurance or a life insurance rider for disability, there is no universal right answer. For those looking for customizable and robust disability insurance coverage, with an emphasis on income replacement, an individual policy is likely the way to go. 

A waiver of premium rider, by contrast, is a good option for those who may have comprehensive disability coverage through work but want to protect their life insurance policy from lapsing in the event of a disability. Finally, a disability income rider is a good option for those seeking to boost their coverage through a single life insurance policy.

• Learn more about when to buy disability insurance and how long coverage should last.

Most people want to ensure that their loved ones are taken care of long after they’ve passed. One of the best ways to do this is by purchasing life insurance. That way, in the case of death, your beneficiaries will receive a lump sum they can use to settle your estate, help clear the mortgage, pay for your childrens’ education costs, and more.

How much coverage you will qualify for, as well as how much you’ll spend each month on premiums, all depends on your insurance rating, also known as a risk classification.

Insurance rates are based on complex actuarial tables which consider a host of variables to predict the mortality rate of any given individual. This mortality rate is then combined with the length and type of the policy and a rate is defined for the individual applying for insurance.

Thus, when someone applies for life insurance, there are four possible outcomes: 

1. A policy is issued at a standard or preferred rate
2. A policy is “Rated” or the customer is given a “Rating” and the policy is issued at a higher premium
3. The policy is deferred or postponed pending further information
4. The policy is outright denied as the applicant is deemed uninsurable

This article focuses on the second outcome: insurance ratings. We explain what an insurance rating is (and in turn, a rated policy or a rate-up policy) and your options when faced with a rating.

What does it mean to be rated for life insurance?

As part of your application for life insurance, you’ll have to go through an underwriting process that may result in a rating. Underwriting is basically how an insurer determines your risk factor. Each of Canada’s biggest life insurance companies has its own underwriting guide, which is basically a manual describing how applicants are evaluated. 

Medical underwriting is one part of the underwriting process; it looks at an applicant’s medical history and if there are any unusual events in the immediate family’s medical history. Depending on the amount of insurance, age and preliminary investigations, underwriters could request a more detailed evaluation. The evaluation could require blood samples, physical examinations, and doctor’s notes in addition to interviews, and written or digital questionnaires you complete with your insurance advisor or paramedical personnel.

Based on this data, underwriters may assign the applicant their rating, impacting the premiums for the policy. If the underwriters determine the applicant is in substandard health, they are considered to be at an elevated risk level. However, there is a moderately broad range that qualifies as standard. If the applicant is in better health than standard they may receive a preferred (lower) rate; but, if they are on the other end of the health spectrum but still considered insurable, they may receive a rating.

What are the reasons you can get a rating?

Insurers look at multiple criteria when determining your rating. Here are some of the items they consider:

• Health: Insurers are very concerned about the status of your health. They’ll want to know about any existing medical conditions, if you’re on medication, and how you’re treating any health issues. They’ll also want to know whether or not you’re a smoker.
• BMI: Insurers will ask for your height and weight so they can calculate your Body Mass Index (BMI) measurement. If by that standard, you’re considered underweight or overweight, you may be given a higher insurance premium. 
• Family health history: Aside from asking about your own health, insurers will want to know about your family’s health history. So, if your mother has been diagnosed with diabetes or your father suffered from heart disease, unfortunately, that could be a strike against you in terms of your insurance rating.
• Alcohol and drug use: A casual drink with friends is not going to raise your insurance rates. But, if you have a history of abusing drugs and alcohol, this can give you a higher risk classification. In the past, people who smoked marijuana were rated higher because they were considered smokers. Now that cannabis has been legalized, light marijuana use will not affect your premium. However, regular cannabis consumption will be treated the same as smoking in most instances. Read more about marijuana and life insurance.
  
• Lifestyle: The kind of life you lead also impacts your premiums. If you’re a daredevil into skydiving or other hazardous activities, that can increase your rates. The same applies if you participate in a lot of international travel. If you travel fairly often to a country deemed as unsafe, insurers may raise your rating because you’re exposed to a higher risk of death.

Does an insurance rating affect your premiums?

As described above, insurance premiums vary by the risk of death associated with the applicant. Someone who is young, in relatively good health, and doesn’t particpate in any high-risk activities would get a would get the better rate, compared to an older applicant, who leads a high risk lifestyle. 

And, if you’re a smoker, that means you could be paying three times as much for your premiums, depending on your age. That’s because of all the associated health risks that could increase your chances of death, such as cancer, lung diseases, and stroke.

Does an insurance rating affect your future insurability

If an insurer feels like they’re taking on too much risk to cover the risk of insuring your life, they can deny you coverage. However, all is not lost. You can always try applying through another company that may assess ratings differently, or offer insurance to a wider spectrum of applicants. 

It is important to note: insurance companies share information through an organization named  the Medical Information Bureau (MIB). 

North American insurance companies share limited information regarding insurability of an applicant through the MIB. They do this to enhance transparency and consistency of information between the companies. In rare cases, the information the MIB provides prevents applicants from holding too many policies simultaneously or providing false information to get insured by one company after getting declined by another.

Thus, if you are a heavy smoker and are declined for coverage by one company you cannot go to another claiming non-smoker status.

You can also gauge your no-medical life insurance options. Instead of taking health tests and exams, you simply answer a medical questionnaire with your life insurance advisor. This can be helpful for those who have greater health struggles or other factors that may affect their insurance rating.

The downside, however, is that the insurance premiums could be significantly higher than a standard rated fully underwritten life insurance policy. But, if an applicant has health concerns that may lead to a rating, no-medical life insurance provides an option that can result in lower premium than the rated one.

Can you change your insurance rating?

If you are able to make changes to your health and lifestyle, it is possible to change your insurance rating over time. It will require drastic measures, though, such as quitting smoking, losing weight, dropping your cholesterol and/or reducing your blood pressure, and sustaining these changes for a period of time – typically two years.

Typically, if there is potential for reconsideration of one’s rating, an insurance company will specify what steps should be taken or timelines to follow (such as: “”reconsideration after a weight loss of 35lbs or more maintained for 1 year“).

Since insurance premiums increase over the years, it may not be your best bet to hold off buying life insurance until your health has improved. What you think you’ll be saving may be offset by how much premiums increase as you age.

The safer bet is to secure the coverage you can now and apply again for reconsideration or a new policy once your health factors improve – it’s perfectly normal to hold more than one life insurance policy while you decide which coverage you should keep, should you qualify for more down the line.

What are your options if you have been rated?

So, you’ve been given a rating and your insurance options aren’t looking too good. What now? Well, there are a couple of different strategies you can try as mentioned above.

First, you can apply for insurance with another insurance provider. Every insurance company differs in terms of how they conduct their ratings, how their premiums reflect those ratings, and how much insurance coverage they will offer for certain rating classes. 

Secondly, if your premium is beyond what you can reasonably budget for, consider lowering your coverage if that’s an option so you can pay less each month.

Lastly, explore your guaranteed insurance options (simplified, guaranteed, no medical life insurance). The premiums may be higher than fully medically underwritten, but a simplified medical questionnaire may not touch on the specific issue that produced your insurance rating. Insurance companies like Canada Protection Plan, Empire Life, Industrial Alliance, and Humania offer simplified coverage options.

To learn more about insurance ratings, how they may affect you, and explore your options when it comes to coverage, speak to one of our experienced advisors.

Every year over 50,000 Canadians will experience a stroke, making it the leading cause of adult disability in the country. Symptoms vary, but the short and long-term effects of a stroke can be debilitating and even life-threatening. Strokes are also the third leading cause of death in Canada.

While insurance can’t protect against the medical risk of stroke, it can provide a financial safety net should you or a loved one be diagnosed with this critical illness. Critical illness insurance can help pay for treatment, care, or general support. In Canada, strokes represent the third most common diagnosis claimed through critical illness insurance. 

Keep reading to find out more about how critical illness insurance can benefit you if you or a loved one is at risk for stroke.

What is a stroke?

A stroke, also known as a cerebrovascular accident, occurs when the brain suffers from blood flow loss due to a hemorrhage, embolism, or thrombosis. The loss of blood damages brain cells, which, in turn, causes stroke and associated symptoms. Early symptoms of a stroke include numbness, confusion, headaches, and loss of balance, while long-term effects can manifest as speech impairments, memory problems, and permanent loss of function.

There are three main types of stroke:  ischemic stroke, hemorrhagic stroke, and transient ischemic attack (TIA). 

• Ischemic strokes (the most common type of stroke) are caused when a blood vessel in the brain becomes blocked by a clot or build-up of plaque. 
• A hemorrhagic stroke occurs when a blood vessel in the brain ruptures. This type of stroke has links to high blood pressure.
• A TIA, also known as a mini-stroke, is caused by a temporary blockage of an artery in the brain. This type of stroke typically has minor, short-term symptoms, but is often indicative that another stroke is imminent

What is critical illness insurance?

Critical illness insurance is a type of coverage offered by life insurance companies (typically as an add-on to a life insurance policy, but can also be purchased as a stand-alone policy) that pays out a tax-free lump sum should the insured be diagnosed with a life-threatening illness or suffer a serious health event while the policy is active. Unlike traditional life insurance, critical illness insurance issues a benefit while the insured is alive, providing them and their family with financial support as they manage the financial and health impact of a life-threatening illness. It should be noted that the critical illness insurance benefit is only paid if the insured is diagnosed with a covered illness, as specified in the policy. The proceeds of the insurance can be used fully at the discretion of the insured.

Does critical illness insurance cover stroke?

Yes! Strokes fall into the category of covered health conditions in most critical illness insurance policies. Strokes along with cancer and heart attack are the most common types of claims for this type of insurance. Strokes are one of the main conditions covered both in basic critical illness policies (that cover 3 or 4 conditions) or enhanced critical illness insurance policies (that cover 25 or 26 conditions). 

Depending on the type or severity of strokes, however, there may be exclusions. For example, TIAs or mini-strokes may not qualify as a critical illness. Strokes caused by trauma may also not be covered depending on the life insurance provider.

Most Canadian insurers will follow the definition provided by The Canadian Life and Health Insurance Association (CLHIA) for various covered conditions including stroke. For critical illness insurance purposes, a stroke is defined as an acute cerebrovascular event that results in acute neurological symptoms and new neurological deficits that persist for more than 30 days after the initial diagnosis. The CLHIA has fully defined all the 26 commonly covered illnesses.

Read the full CLHIA definition of stroke below.

How long do I have to wait to file a claim after having a stroke?

Most critical illness insurance policies include a survival period clause. In short, this means that an insured person must survive for at least 30 days after a stroke diagnosis before filing a claim. It is only after this period that the benefit will be paid. 

Most companies will require that medical information about the diagnosis and any signs, symptoms, or investigations leading to the diagnosis must be reported to the company within six months of the date of diagnosis. 

To find out more about insurance for strokes and other critical health conditions, head to our critical illness insurance page. To better understand how much critical illness insurance coverage you might need, consult our critical illness insurance calculator.

Can I start a critical illness insurance policy after I’ve had a stroke?

Generally, it is advisable to purchase critical illness insurance before you have been diagnosed with any serious health condition or illness. However, it is still possible to buy critical illness coverage after you’ve had a stroke. 

If you’ve already had a stroke or other critical illness diagnosis, one option is guaranteed critical illness insurance. This type of coverage does not require a medical evaluation but is usually accompanied by a two-year pre-existing condition exclusion. In other words, if you had a stroke in the two-year period before applying for coverage, the policy will not issue payment if another stroke happens within the first two years of coverage. The two-year exclusion may also apply if a different critical illness condition occurs that is directly attributable to the stroke. 

Depending on the severity of the stroke and the time period (typically several years since the stroke) that has elapsed, it may be possible to get traditional, fully underwritten insurance. 

As always, reach out to one of our insurance experts if you need help understanding the potential options for coverage. 

Can I get critical illness insurance if I have a family history of stroke?

As with life or health policies, an insurance company will look at your family history to determine risk, eligibility, coverage, and cost of critical illness insurance. If you have a family history of stroke (or any other critical illness), the insurance company will assess your health risks closely. If the predisposition to stroke (or any other critical illness insurance) may seem elevated, then you may receive an insurance rating (i.e. a higher insurance price) or an exclusion (i.e. certain conditions may not be covered for claims). It’s best to chat with an advisor to determine how your family’s health history may impact your critical illness insurance coverage. 

If you know you are at a high risk of stroke through either genetic testing or through family history, you should absolutely get critical illness insurance. While you may not have control over some aspects of your familial health history, you have control over your financial health. Critical illness insurance is an essential component of financial protection for every individual.

Full definition of stroke according to CLHIA

Stroke (Cerebrovascular Accident) means a definite diagnosis of an acute cerebrovascular event caused by intracranial thrombosis or hemorrhage, or embolism from an extracranial source, with:

• acute onset of new neurological symptoms, and
• new objective neurological deficits on clinical examination,
• persisting for more than 30 days following the date of diagnosis. These new symptoms and deficits must be corroborated by diagnostic imaging testing. The diagnosis of stroke must be made by a specialist.

Exclusion: No benefit will be payable under this covered condition for:

• Transient Ischemic Attacks (TIA); or
• Intracerebral vascular events due to trauma; or
• Lacunar infarcts, which do not meet the definition of stroke as described above.

Want to learn more?

Critical illness insurance is a great option for those who are concerned about future diagnoses and the costs associated. With critical illness insurance, some of that financial burden and worry can be alleviated. For more info, reach out to one of our advisors to chat about which options and policies are best for you. 

Life insurance provides a financial safety net for your dependents when you die. As with many other things in life, too little or too much life insurance can be a bad thing.

On one hand, you don’t want your loved ones to worry about money on top of dealing with the pain of your loss. On the other, if you go overboard with your life insurance benefit amount, you may end up paying much higher premiums than you can logically afford.

This article will explore how you can avoid purchasing too much life insurance.

Why do people buy life insurance?

Two of life’s certainties, death and taxes, can both take from your family if you (as an income-earner) pass on. Buying life insurance helps to protect your surviving family financially.

The benefit from a life insurance policy makes it easier for your family to deal with your funeral expenses, house payments, debts, future education, and so much more.

In Canada, the lump sum death benefit is not subject to income tax, so your beneficiaries will receive the total amount of the benefit, tax-free. Therefore, buying life insurance ensures your dependents are well taken care of in your absence.

Calculating how much insurance you need

Insurance needs differ from person to person. While a huge lump sum looks appealing, it may be too much (or too little) for your needs.

The exact amount of insurance you need depends on several factors like:

• Number and age of dependents
• Debt profile
• Mortgage loan size and amortization schedule
• Age
• Marital status
• Total household income

A thorough analysis of your financial and personal circumstances is the first step to determining the amount of insurance you need.

For example, if you are the sole breadwinner with several dependents and a new mortgage, you will likely need more coverage. In contrast, if you have a single dependent and your spouse has a substantial income, a large life policy may not be necessary.

If you determine that your dependents’ needs outweigh the coverage you can get on one policy, you may need to take out a second or third life policy. Canadian laws don’t prohibit holding multiple life insurance policies.

Multiple policies are advantageous for a number of reasons: they can increase the size of the death benefit you are leaving behind, or can be structured in ways that cover your riskiest years with a higher benefit and taper off as you get older and pay down more debt (more on that later). However, you also have to pay multiple premiums, which can hit your pocket a little harder than a single policy.

Calculating how much insurance you and your family need can be complicated given the interplay of so many variables. Use a life insurance calculator to simplify the process. It helps determine the coverage you need based on your current financial circumstances.

Why too much life insurance can be a bad thing

You may think a larger death benefit (or multiple death benefits) is better since it may meet or even improve your family’s financial needs. However, too much coverage can be a negative, especially if it takes away from the present.

The financial reality

The expense of larger or multi-policy premiums can set you back financially. Inflated insurance premiums can take income and funds from the present day that you could have spent enjoying while you’re still here with your loved ones. Preparing for the inevitable is essential and a thoughtful gift for those that depend on you, but you need some balance.

The type of coverage

Having too much of one type of insurance may not be the best coverage for your financial situation. Term insurance is cheaper, but it will only be valid for a specified period. In contrast, whole life coverage lasts indefinitely, but comes with higher premiums.

For instance, if you’re older and your children have grown up, finished college, and left the house, and you are close to paying off your mortgage a 20 to 30-year term insurance policy may mean paying for coverage you don’t need. At that point in your life, whole life insurance coverage may be more appropriate.

If you want the most comprehensive coverage you can get, using a life insurance ladder strategy can help you find the right balance of coverage that protects you in the long term.

The risk of your coverage lapsing

Lastly, if you struggle with your payments and eventually miss a few, your policy will lapse. You will have wasted the money you invested in your protection in the first place. Even worse? Requalifying for the coverage may be more expensive if you do right the ship financially and decide to take on coverage again. Stick with a policy that you know you can afford to prevent a lapse in your coverage.

How can you tell if you have too much life insurance?

The goal when purchasing life insurance is to take care of your loved ones when you’re no longer there to do so. Taking out more insurance than you need, while thoughtful, is an unnecessary expense that you may not always have the luxury of affording.

But how do you know when you have too much? Watch out for these tell-tale signs.

Difficulties paying for insurance

One of the biggest signals that you have too much life insurance coverage is struggling to pay your premiums. Generally, an insurance policy that suits your needs should fit easily into your budget. If you find yourself questioning the expense of every insurance payment, it may mean you are overinsured.

Payout / Asset mismatch

Life insurance policy coverage is typically higher than the value of your assets. However, if your coverage substantially surpasses your assets, it’s a sign that your policy (or policies) outweighs your needs.

Cost of care

Life insurance meets a critical need in your absence. The proceeds should still be able to take care of your family in the unfortunate event of your passing. However, if the coverage from your policy exceeds the amount you would be contributing if you were still there, then it may be a larger amount than your dependents require.

An appropriate coverage should match – not exceed – the continued costs of caring for your dependents if you were alive.

What to do if you have too much life insurance

After you determine your insurance needs and if you realize you are overinsured, what’s the next step?

First, you need to compare rates to see if you can change your policy. Talk to an insurance advisor so you don’t inadvertently create gaps in your life insurance coverage.

An insurance advisor can give you the best recommendation for realigning the structure of your life insurance policies. They can help with suggestions like:

• Moving to a different policy or carrier for a better price or better policy structure through life insurance riders.
• Alternative coverage arrangements like insurance laddering. As mentioned earlier, life insurance laddering can help you match several different life insurance policies to the appropriate years of risk while providing an extended coverage time frame.
• Replacing expensive, existing insurance coverage (like creditor or mortgage insurance, or a guaranteed or simplified policy) with a fully underwritten term life insurance policy.

Purchasing too much life insurance can mean tying up your hard-earned cash when you can better enjoy it while you are still here with your loved ones. That said, it’s still important to prepare for the uncertainty of the future. Taking a critical look at the amount of coverage you have, determining it’s sufficient for your future financial goals of your loved ones, and adjusting if required can help you find the coverage balance you need to live life to the fullest.

Whether we’ve seen an insulin commercial on TV or watched a loved one prick their finger to test blood glucose levels, most of us are familiar with diabetes in some way. Approximately 10% of Canadians have been diagnosed with diabetes, a chronic condition where one’s body cannot properly produce or use insulin. That rate is expected to reach 12% by 2025. According to the World Health Organization, a high blood glucose level is one of the top risk factors for premature death. Diabetes can drastically impact your day-to-day life and lead to a variety of complications, if not treated properly. 

Below, we’ll dive deeper into what diabetes is and what kind of insurance coverage you can expect to get with a diabetes diagnosis.

What is diabetes?

Diabetes is a chronic condition classified by the body’s inability to properly use or produce insulin. Insulin is a hormone normally found in your pancreas that controls glucose (sugar) levels in the blood. 

Glucose is energy for your cells. When you eat, food travels through your digestive system and is broken down. During this time, glucose is released from some of that food and your pancreas releases insulin. This insulin either tells the cells of your body to absorb the glucose for energy or it tells your body to store the glucose for later. 

If you have diabetes, your body doesn’t respond to or produce insulin how it should. This results in high blood glucose (blood sugar) levels. High levels of blood glucose and diabetes can lead to a lot of complications such as cardiovascular disease, stroke, kidney disease, eye damage(retinopathy), glaucoma, gangrene, or even Alzheimer’s. 

Diabetes can impact anyone at any age although some types are more prevalent among certain demographics. According to the Public Health Agency of Canada, men are more likely to be diagnosed with diabetes than women, with the exception of gestational diabetes. 

What are the various types of diabetes?

There are three main types of diabetes: type 1, type 2, and gestational.   

Type 1 Diabetes

Type 1 diabetes is an autoimmune disease that most commonly appears during childhood, but can also present in adults. Autoimmune diseases are diseases where the immune system misinterprets part of the body as a threat and starts attacking it. In the case of type 1 diabetes, the immune system destroys pancreatic cells that produce insulin. Because Type 1 diabetes is an autoimmune disease, so there are no proven preventions for the disease.

Type 2 Diabetes

Type 2 diabetes is a metabolic disorder that most typically appears in adults over the age of 40, however, you can be diagnosed when you’re younger. Type 2 diabetes occurs when your pancreas doesn’t produce enough insulin to metabolize the amount of glucose in your body or your body isn’t able to properly use the insulin it does produce. Around 90% of people who have been diagnosed with diabetes have type 2. Contributing factors are fitness level, weight, ethnicity, family history, and genetics. Type 2 can be prevented to an extent through lifestyle choices such as diet and exercise.

Gestational Diabetes

Gestational diabetes occurs during pregnancy when your body is unable to produce enough insulin, leading to an increase in blood glucose levels. While gestational diabetes usually goes away a few weeks postpartum, it does signify an increased risk for developing type 2 diabetes in the future. Gestational diabetes can be prevented to an extent through lifestyle choices such as diet and exercise.

Symptoms and Complications

Diabetes can express itself through various symptoms and can lead to a variety of complications. Diabetics can experience increased thirst, increased urination, increased hunger, weight loss, blurry vision, numb hands or feet, and tiredness among other things. If diabetes isn’t managed properly it can lead to conditions such as high blood pressure, nerve damage, eye disease, kidney disease, stroke, or other complications. These symptoms and complications will all be relevant in determining the level of coverage as well as the cost of a policy that an insurance provider may offer

Treatment & Management

Diabetes is treated through the management of blood sugar and insulin levels. Less serious cases of type 2 diabetes can be managed through diet and exercise. For type 1 and more serious cases of type 2, condition management involves monitoring blood glucose levels and administering insulin in response. Some patients may have an insulin pump that automatically administers insulin while others might inject themselves with insulin. Each treatment plan is personalized to the individual in order to mitigate the effects and potential complications caused by diabetes.  

Before offering coverage, most insurance providers will require at least two tests to determine how well your diabetes has been managed. The first of these is a glucose test or sugar reading. This test tells what your blood glucose level is right now. The second test is a HbA1C or A1c test. This test shows your blood glucose levels over the past two to three months by measuring the amount of glucose attached to your red blood cells. Higher glucose levels can be an indicator of poor health and diabetes management and could result in higher insurance prices.

What is critical illness insurance?

​​Critical illness insurance is a type of coverage offered by life insurance companies (typically as an add-on to a life insurance policy, but can also be purchased as a stand-alone policy) that pays out a tax-free lump sum should the insured be diagnosed with a life-threatening illness or suffer a serious health event while the policy is active. Unlike traditional life insurance, critical illness insurance issues a benefit while the insured is alive, providing them and their family with financial support as they manage the financial and health impact of a life-threatening illness. It should be noted that the critical illness insurance benefit is only paid if the insured is diagnosed with a covered illness, as specified in the policy. The proceeds of the insurance can be used fully at the discretion of the insured.

Does critical illness insurance cover diabetes?

No. Critical illness insurance doesn’t cover diabetes, as diabetes in and of itself is not a life-threatening illness. However, complications arising from diabetes can be life-threatening and are covered by critical illness insurance plans. For example, some of the health issues that can arise from diabetes, such as cardiovascular disease, stroke, kidney failure, limb loss, Alzheimer’s, etc, are covered by critical illness insurance plans. If you are at risk for diabetes due to family history, it is a good idea to consider critical illness insurance to cover any potential diabetes-related complications. To ensure coverage of future illnesses, be sure to consult your policy and any pre-existing condition exemptions. If you are unsure, it’s best to have a conversation with an advisor.

Can I get critical illness insurance if I have been diagnosed with diabetes?

Your options for critical illness insurance will be limited if you have already received a diabetes diagnosis. Your diabetes will be considered a pre-existing condition that can lead to the conditions covered by critical illness insurance. Potential coverage depends on the type of diabetes you have, past complications, and how well your diabetes is managed. If your diabetes is well managed, then the insurance company may approve you for coverage, although there will be a risk of an insurance rating i.e. a price increase. 

If you don’t qualify for standard critical illness insurance coverage plans, you can still qualify for  non-medical critical illness insurance policies — simplified issue or guaranteed issue. If you have a family history of diabetes, it’s better to get critical illness insurance sooner than later as insurance companies as a diagnosis of diabetes can severely limit your coverage options. Simplified or guaranteed coverages, while being more accommodative, may impose a pre-existing condition exclusion as well as a 2-year waiting period.

Read more about simplified issue vs guaranteed issue insurance.

To determine what kind of coverage you qualify for, be sure to chat with one of our advisors.

What does critical illness insurance cover?

There are 26 conditions that most insurance carriers cover. This covers conditions such as blindness, limb loss, dementia, cancer, heart attack, and stroke. Often these conditions and subsequent expenses are not fully covered by basic health coverage. Critical illness insurance can offer great financial peace of mind, so you can focus on the most important thing: your health. 

The Canadian Life and Health Insurance Association (CLHIA) has defined the 26 conditions that are commonly covered in a critical illness insurance policy. Some policies, such as a children’s critical illness policy or rider, may cover up to 35 conditions, including illnesses commonly diagnosed in children such as autism, cerebral palsy, and more.

Can I get life insurance if I have diabetes?

You can get life insurance if you have diabetes but options can be limited. Life insurance coverage will depend on how well your diabetes has been managed, the type of diabetes you have, and if you have had any complications related to the condition. If you are in good health and your diabetes is stable, there’s a good chance you could qualify for standard, medically underwritten life insurance. However, like anyone with an underlying condition, it’s best to consult an advisor to determine how your conditions and health will impact life insurance options.

Want to learn more?

Critical illness insurance is a great option for those who are concerned about future diagnoses and the costs associated. With critical illness insurance, some of that financial burden and worry can be alleviated. 

Try our free critical illness insurance calculator to figure out how much coverage you might require or speak to our friendly advisors.

If you’re a new or young parent, death may be the last thing you want to think about. But choosing the right life insurance policy can protect your family in case an unfortunate circumstance occurs.

This article discusses items to ponder for new and young parents purchasing life insurance and includes three types of life insurance policies to consider.

Why is life insurance important for young parents?

Life insurance provides peace of mind. By purchasing life insurance, you know your family is financially protected if you or your partner passes away. The death benefit from a policy can compensate for lost income, pay down debts, and cover funeral or other expenses.

If you or your partner is a stay-at-home parent, it’s still important to purchase life insurance. The loss of a stay-at-home parent likely means additional child care costs, which can amount to thousands of dollars per month depending on where you live. Although life insurance can’t replace the emotional loss of losing someone, it can cushion the financial hardships.

And remember, if you have not had your child yet and are still expecting, you can get life insurance while pregnant.

What’s the best life insurance policy for parents?

Many life insurance policies are available to new and young parents. The policy that’s best for you depends on your particular circumstance. No policy is a perfect fit for every new or young parent, but popular options include term life insurance, whole life insurance, and joint life insurance.

This article goes into detail about each below. Our insurance reviews also offer insight into which companies offer the best insurance policy for young parents. And lastly, parents can take advantage of insurance riders in their policy to augment their coverage and protect their children and partner as well.

Term life insurance

Term life insurance is often the best life insurance for young parents. This type of policy covers a specified term (such as 10 or 20 years) for a specified coverage amount. The insurance company considers factors such as your age, health, habits, and hobbies to calculate the premiums.

The coverage amount is paid to your beneficiary when you die as long as you’re still within the specified term and have kept up with the premiums.

Young parents commonly choose term life insurance because it can remain active until your death doesn’t cause significant financial consequences for your family. This may be after you’ve paid off your mortgage and other financial obligations and your children are financially independent.

You should have enough coverage to pay off outstanding debts and fund goals, such as sending your kids to college or university.

Term life insurance is also affordable to young parents. The chances of you dying when you’re young are significantly less. As a result, there’s a lower risk to the insurance company, and they can thus charge you a lower premium. Ultimately, this allows you to create a strong safety net for your family at a low cost.

Whole life insurance

Whole life insurance, as the name suggests, lasts the whole of your life. It has various forms such as universal life insurance and permanent life insurance. In essence, no matter how many years have passed or what age you’re at, your death triggers a payout for your beneficiaries.

Since no one lives forever, the payout from a whole life insurance policy is guaranteed. As a result, its premiums are significantly higher than the premiums for term life insurance.

You may choose a whole life insurance policy as a young parent if you have a child that likely has to depend on you financially for the rest of their life. This may be the result of a disability or other need. A whole life insurance policy guarantees that no matter when you pass away, a death benefit will be there to protect your family.

This policy can also ensure coverage for funeral expenses or help pay for estate taxes.

Joint life insurance

Married or common-law partners may opt for joint life insurance. This type of policy allows you to reduce the cost of premiums by either combining you and your partner’s policies into one, or sharing the administrative costs related to two policies. Joint policies commonly come in one of three forms:

Joint first-to-die life insurance

Joint first-to-die policies cover both you and your partner under one policy with a single term, coverage amount, and premium. The policy pays out and terminates when one of you dies.

If the surviving partner continues to want life insurance coverage, they must get reinsured, which includes a new medical check and a higher premium. If the death occurs later in the surviving partner’s life, finding a new life insurance policy may be much more expensive.

Joint last-to-die life insurance

Joint last-to-die policies is similar to a joint first-to-die policy, but the coverage amount is only paid once you and your partner both pass away. The term, coverage amount, and premiums are the same for both partners during their life. This policy provides a death benefit for your remaining children once you and your partner are no longer here. It can also help pay remaining debts and tax obligations.

A joint last-to-die policy doesn’t, however, provide any benefits when the first partner passes away. This creates issues as the loss of one partner can mean reduced household income, an expensive funeral bill, and additional childcare and home care costs.

Combined life insurance

Combined policies consist of two individual life insurance policies from the same insurer. Because both policies are from the same provider, you save some money due to lower administrative costs.

A combined life insurance policy can compensate for the shortfalls of a joint first-to-die or last-to-die policy while still providing a lower premium. However, the prior two joint policies remain more affordable because there’s only one death benefit. In contrast, two individual policies provide two death benefits.

While a joint first-to-die or last-to-die policy should be considered by new or young parents who need a more affordable premium, combining individual insurance policies is more advantageous for parents if possible.

Who should parents choose as beneficiaries?

A beneficiary is the recipient of your life insurance’s death benefit. There can be one beneficiary or multiple. If you don’t name a beneficiary, the policy’s payout goes to your estate upon your death.

It’s common to choose your partner as your beneficiary. This leaves them funds to arrange your funeral, pay off remaining debts, and purchase necessities for your family.

Leaving the money to your children is also common, specifically for single parents. However, most Canadian provinces disallow children under the age of 18 to control the money from a death benefit. As a result, it may be appropriate to create a trust for the payout.

Read more about how to create a trust in Canada. 

With a trust, the trustee can distribute the money to your children as necessities arise and then in full when they reach adulthood. It’s best to speak to a financial planner or lawyer to understand the intricacies of a trust.

You can also leave the life insurance payout to your spouse and children as co-beneficiaries.

Final thoughts

A proper life insurance policy that fits your circumstance is crucial to planning your family’s financial security. Reach out to one of our expert advisors below to discuss your insurance needs and find what policy may be right for you. You’ll also receive no-obligation quotes for life insurance for parents or any coverage you’re seeking.