GROUP CRITICAL ILLNESS INSURANCE IN CANADA

Group critical illness insurance provides a lump sum cash payment directly to an employee if they are diagnosed with a qualifying critical illness after the effective date of the policy offered by their employer. It is an employee benefit that provides financial assistance in case of a serious health crisis.

Unlike group life insurance, which pays beneficiaries upon death, group critical illness insurance pays out while the insured employee is still living. The payout happens after the diagnosis and survival of a covered critical illness to help the employee cover immediate costs related to treatment and recovery. Employees can use the funds at their discretion without restrictions.

In most group plans, the employer purchases a policy that covers a defined list of critical illnesses. Employees enrolled in the group benefits plan are eligible for the lump sum payment if they meet the policy’s criteria for a covered diagnosis.

The covered conditions defined as “critical illnesses” vary by insurance company and policy. Basic group critical illness insurance policies generally cover the “big three” illnesses:

• Cancer
• Heart Attack
• Stroke

More comprehensive policies cover over 25 conditions, including:

• Blindness
• Deafness
• Alzheimer’s Disease
• Parkinson’s Disease
• Coma
• Paralysis
• Major organ failure (lung, liver, pancreas, kidney)
• Severe Burns
• Multiple Sclerosis
• Aplastic Anemia
• Occupational HIV Infection
• Coronary Artery Bypass Surgery
• Aortic Surgery
• Heart Valve Replacement/Repair
• Kidney Failure
• Major Organ Transplant

The conditions covered under an employer’s group critical illness plan are defined in the insurance contract. Employees should understand the policy definitions of covered illnesses and any applicable limitations or exclusions.

The primary individuals covered under a group critical illness insurance plan offered by an employer are:

• Employees: This includes both full-time and part-time permanent employees actively at work at the company. Depending on policy terms, it may also cover temporary, contract, seasonal, and remote employees.
• Association Members: All enrolled association members are eligible for insurance plans sponsored by professional/industry associations.

In addition to employees, group critical illness plans often extend coverage to dependents like:

• Spouses: Legal married spouses or common-law partners are typically covered.
• Children: Biological, adopted, or stepchildren under age 21 (sometimes up to 25 if full-time students) are generally included.

Employers and insurance companies outline eligibility requirements for their group policies. Common requirements include:

• Active Work Status: Employees must work actively to enroll, not away due to disability or illness.
• Minimum Employment Period: Some plans mandate a waiting period before new employees can join the policy, such as 3-6 months.
• Minimum and Maximum Age: Eligibility often falls between age 16 to 70.
• Health Evidence: Medical questionnaires or exams may be required for higher coverage amounts.

In addition to covered conditions, group critical illness policies include other key provisions that employees should understand, such as:

• Benefit Amount: The lump sum payment amount provided for a covered diagnosis may be a fixed dollar amount or a multiplier of salary.
• Survival Period: The minimum period that an insured must survive after diagnosis to qualify for the payout, typically 30 days.
• Exclusions: Certain pre-existing medical conditions may be excluded from coverage for a period of 6 to 12 months. Lifestyle diseases like alcoholism or drug abuse may also be excluded.
• Tax Status: Premiums paid by the employer are taxable benefits. Benefit payments to employees are non-taxable income.
• Dependent Coverage: Additional premiums may apply to include spouses and dependent children.
• Recurring Claims: Rules regarding multiple benefit payments for subsequent diagnoses, reoccurrences or unrelated critical illnesses.

For employees, any premium contributions towards group critical illness insurance paid by their employer are considered a taxable employment benefit. The amount will be included in the employee’s taxable income on their T4 slip.

However, if an employee makes a successful claim for critical illness, the entire lump sum payment received is tax-free. Employees do not pay any income tax on the cash payment amount of an approved critical illness insurance claim.

While Canada has universal healthcare, provincial health plans do not cover many ancillary costs related to critical illnesses. Having group critical illness insurance allows employees to access funds they can use at their discretion during medical treatment and recovery. Key advantages include:

• Replacing lost income: If unable to work during treatment, the cash funds can help replace lost wages.
• Covering additional treatment: Funds can pay for experimental therapies, alternative treatments, travel costs for care, and other uncovered medical costs.
• Financial security: The cash lump sum eases financial stress about household expenses and bills.
• Homecare and modifications: The funds can be used to pay for home health aides, childcare, special equipment, and home modifications.
• Emotional support: Employees gain peace of mind knowing they have funds to obtain support services.

Offering group critical illness insurance helps attract and retain talent by enhancing the employer’s benefits package at a relatively low cost. Key advantages for employers include:

• Improved recruitment: The benefit makes hiring easier by differentiating the company as an employer of choice.
• Higher retention: Employees are less likely to leave knowing they have critical illness protection.
• Increased productivity: Ensures employees can focus entirely on their work duties.
• Reduced absenteeism: Minimizes unplanned absences when health issues arise.
• Low premiums: Group buying power provides savings compared to individual plans.
• Employee morale: Employees perceive this benefit as an indication that the company cares about their well-being.
• Customization: Policies can be tailored to meet the company’s budget and workforce demographics.

Overall, group critical illness insurance is an affordable investment in employee wellness that positively impacts the employer’s bottom line.

Here is an overview of estimated monthly premium costs for group critical illness insurance:

Age Group	Monthly Premium Range	Additional Monthly Cost per $25,000 Increase	Smoker Premium Increase
25-35	$10 – $25	1.5x – 2x	10% – 20%
35-45	$20 – $40	1.5x – 2x	10% – 20%
45-55	$30 – $60	1.5x – 2x	10% – 20%
55+	$50 – $100+	1.5x – 2x	10% – 20%

When implementing group critical illness insurance, key steps for employers include:

1. Assessing workforce needs: Survey employees to gauge their interest in critical illness coverage and benefit amount preferences.
2. Comparing insurer options: Consider coverage details, premiums, exclusions, limitations, and support services offered.
3. Selecting optimal coverage: Decide on benefit amounts and covered conditions based on costs and employee needs.
4. Meeting legal requirements: Confirm the policy meets provincial insurance regulations.
5. Enrolling employees: Communicate plan details and have employees complete eligibility requirements and paperwork.
6. Paying premiums: Remit regular premium payments to the insurance company to maintain coverage.
7. Handling claims: Establish procedures for employees to initiate claims and provide required medical documentation.
8. Providing support: Have HR assist employees in understanding the policy and navigating the claims process.

Beyond just the critical illness insurance policy itself, some other services employers can provide include:

• Mental health support: Access to online tools, counselling services, therapists, and reintegration programs for employees recovering from critical illnesses.
• Wellness benefits: Gym memberships, smoking cessation plans, nutritionists, and preventative health screening.
• Patient advocacy: Guidance and resources from dedicated health professionals to help employees understand diagnoses, treatment options, and clinical trials.
• Group Disability insurance: Income replacement if employees are unable to work even after their critical illness recovery.
• Medical second opinion services: Expert consultation and review of diagnoses and treatment plans for complex medical cases.
• Post-diagnosis support groups: Peer discussion groups for employees to share experiences and provide mutual support.
• Travel assistance: logistical support and preferred rates for employees who must travel long distances for medical care.

This wrap-around support can accelerate both the medical and emotional recovery of employees facing critical illnesses.

The group critical illness insurance market in Canada is served by several major insurance companies along with some smaller regional providers. When considering group plans for their workforce, employers should research which Canadian Employee Benefits Providers offer the best options for their specific needs and situations.

Below are 5 of the leading group critical illness insurance providers in Canada that offer competitive plans and benefits:

Sun Life Financial

Sun Life Financial is one of the leading insurance providers in Canada offering group critical illness coverage. They have over 150 years of experience in the Canadian market. Sun Life provides critical illness policies as part of comprehensive benefit packages for employers.

Manulife

Manulife is a major insurance company in Canada that offers group critical illness insurance. They have developed specialized expertise in critical illness products catered to Canadian businesses. Manulife works with employers across industries to design policies that meet their needs.

RBC Insurance

RBC Insurance is part of Royal Bank of Canada and provides group critical illness plans. RBC Insurance leverages the financial strength and resources of RBC to offer robust protection for organizations purchasing coverage for their employees. They are a trusted source for group benefits.

Canada Life

Canada Life is a well-known insurance provider in Canada offering critical illness coverage for employer groups. They bring together experience, innovation and customer service to create competitive critical illness products. Canada Life aims to make group critical illness insurance easy to understand and access.

Desjardins Insurance

Desjardins provides group critical illness products as part of the Desjardins Group, the leading cooperative financial group in Canada. They draw on this cooperative heritage to offer responsible critical illness insurance for employer groups seeking financial protection.

In addition to these major insurers, smaller regional companies may offer competitive group critical illness options for certain industries or geographic markets. Comparing multiple providers is crucial to finding the best value in group critical illness coverage for any employer and their workforce demographics.

A group critical illness insurance policy should be considered a core employee benefit. It provides crucial financial support directly to employees when they need it most. As medical treatments improve survival rates for serious diseases like cancer and heart disease, this coverage will take on even greater importance by helping protect employees during recovery.

Employers gain an advantage in recruitment, retention and productivity by providing group critical illness insurance. With modest premium costs, group plans make this vital benefit accessible to protect an organization’s most valuable asset – its workforce.

Article Sources

• Group Critical Illness – aviva.co.uk
• Group critical illness insurance – securian.com
• A Comprehensive Guide to Understanding Group Critical Illness Insurance in Canada – policyadvisor.com
• Group critical illness insurance in 2025: Get free quotes – hellosafe.ca