These days, life can get pretty busy. Between work, family, Netflix, laundry, and more work, Canadian lawyers are finding it hard to carve out a dedicated time to foster their existential angst, particularly the not-insignificant chance of being diagnosed with a major illness. The “good” news? That doesn’t keep these grim possibilities from sneaking into our day-to-day life anyway—and maybe even influencing you for the better. After all, there’s a reason you strive to eat a balanced diet and stay active, and it isn’t just because the elevator at work has been out of order since last summer.
Being healthy is important to Canadians. Every January, for example, health-related goals, such as exercising more, eating healthier, and losing weight are among the most common New Year’s resolutions.1 Good health lays a foundation that reduces your chances of getting sick and mitigates the severity of illnesses you can’t avoid (because even the most avid chia seed enthusiast knows there are some things you can’t control).
But have you ever considered the role insurance can play in your overall fitness plan?
As much as Canadians are striving for healthier lifestyles, diagnoses of illnesses like cancer are on the rise, especially among young people, who’ve seen a 79.1% increase of diagnoses since 1990.2
Critical illness insurance provides a crucial financial safety net for those dealing with major health events. The coverage pays out a tax-free, lump-sum payment upon the diagnosis of conditions such as cancer, stroke, or heart attack. The money is yours to use however you’d like, from offsetting costs relating to your recovery to taking a once-in-a-lifetime trip with loved ones. What’s more is that unlike disability insurance, critical illness benefits are paid regardless of whether or not your condition keeps you away from work.
We talked with Lawyers Financial insurance advisor Jim Thompson about the importance of critical illness insurance, how it differs from other types of living benefits, and what to consider when choosing a policy.
Q. In your opinion, do you think enough Canadians are protected with critical illness insurance?
A. In general, no.
From my experience, if people do have coverage, it’s usually through their group benefits, which probably aren’t very comprehensive. Unfortunately, I find that a lot of Canadians have a very limited understanding of what critical illness insurance can offer, which is too bad because I’ve seen the difference it can make for people.
Since the policy offers a tax-free lump-sum payment, you’re free to use the money for whatever you’d like. I’ve seen people take trips of a lifetime with their families, and I once had a client who took the money and used it to help transition into working part-time. Critical illnesses can have a profound impact on people and their perspective on life, and the money offers them a chance to reorient themselves once they’ve completed their recovery.
Q. What factors should Canadian lawyers consider when deciding on a critical illness policy?
A. Age, net worth, assets (and their liquidity), and family situation.
Critical illness insurance is most important for people in the wealth-building phase of their lives, roughly aged 25-55.
At this stage, even high-earning professionals may not have the savings or assets to be protected if and when an illness affects their household.
I also recommend to my clients who are married that both spouses get the coverage, not just the primary income earner. For example, if a stay-at-home spouse were diagnosed with cancer, the money from their coverage could allow the working spouse to take time off to be with them during their treatment.
Q. How do you help clients decide what size of policy is right for them?
A. It’s tricky. At Lawyers Financial, we offer policies ranging from $25,000 to $1,000,000. The most common amount among my clients is $250,000. But there’s no way to say what’s “enough,” because there’s no way of knowing what kind of situation you’ll encounter. We don’t know when something will happen, how serious it will be, and for how long it will affect you. I tell my clients, “If you see value in the coverage, then get as much as you can afford.” All I can say is that no one’s ever said to me that they bought too much coverage when it’s time to make a claim.
Q. What would you say to someone already worried about their cost of living who might be reluctant to add another monthly expense to their budget?
A. Something is always better than nothing, and you can always add more coverage later. For young people, the premiums are quite affordable. A 30-year-old non-smoker, for example, would pay less than a dollar a day for $100,000 of critical illness coverage bundled with $100,000 of term life insurance. (For non-smoking women of this age, the same coverage might cost as little as eighty-nine cents per day).3
If you come to me in 50 years without ever having to make a claim then I’ll say, “Wonderful, let’s celebrate your good health!” It’s a much better situation than the opposite, someone with no coverage getting a cancer diagnosis, and then coming to me and saying, “I wish I had known about this kind of protection.” Because in that situation, I’ve seen people pulling money out of their house or savings, which jeopardizes their retirement plans.
Q. Finally, is there anything you wish Canadians understood better about critical illness insurance?
A. I wish people had a better understanding of the difference between long-term disability insurance versus critical illness insurance.
If someone has no insurance, I’d probably say long-term disability coverage is more important. Especially for young people who’ve still got 40 years of income ahead of them—that’s millions of dollars. Disability insurance—which provides monthly payments to offset lost earnings in the event you can’t work because of a disability—casts a wide net but it’s not perfect. The waiting period for disability insurance is quite long, usually four months, so there are situations where it won’t come into effect. Say you’re ill but only miss a month of work, you can’t get disability payments retroactively, so you’d be without income for that period. Conversely, critical illness insurance pays out after 30 days.
Ideally, you’ll have both.
My job as an advisor is to play devil’s advocate. I bring up the scenarios that could be likely and make sure you’re considering the possibilities I know are out there based on my experience. I have clients blindsided by sudden illnesses all the time. The last thing people should have to worry about is financial stuff when they’re going through something like that.
Related: I don’t need disability insurance, I have group benefits
Illness, taxes, staying up late to watch one more episode: some things in life are unavoidable. But just because a growing number of working Canadians are getting sick, it doesn’t mean that these medical events have to jeopardize your financial health as well. No matter your circumstances, the right insurance policy gives you an opportunity to define these difficult moments by what matters most to you. Whether it be travel, time spent with family, or simply the peace of mind that your post-recovery finances are safe and sound—with critical illness coverage, the choice is up to you.
We can help.
Protect your finances and family from a setback to your personal health. Connect with a Lawyers Financial advisor and ask about insurance that will give you the time and space you need to recover.
Sources: 1. CBC news, “What’s the most common 2025 New Year’s resolution? Not calling it a resolution,” December 31, 2024. Yougov.com, “The most popular resolutions among Canadians,” January 3, 2020. 2. Global News, “Cancer cases soared 79% globally among young adults over past 3 decades: study,” September 6, 2023. 3. These quotes are as of January 28, 2024. They include $100,000 of T5 term life coverage and $100,000 of critical illness coverage and exclude provincial sales tax. A non-smoking 30-year-old female might expect to pay $27.20/month for this coverage. A non-smoking 30-year-old male might expect to pay $28.14. Insurance is personal. Ask a Lawyers Financial advisor for a quote that reflects your situation and needs.
