Is a critical illness insurance payout taxable in Canada?
No. A critical illness benefit paid to you on diagnosis of a covered condition is generally received as a tax-free lump sum, provided you paid the premiums personally. The lump sum can be used for any purpose — treatment, income replacement, or paying down debt.
What is the survival period for critical illness insurance?
Most Canadian critical illness policies require you to survive a set period after diagnosis — commonly 30 days — before the benefit is payable. If the insured dies during the survival period, no benefit is paid (though some policies include a return-of-premium or death benefit).
Do all conditions pay the full benefit?
No. Core conditions such as life-threatening cancer, heart attack, and stroke usually pay 100% of the coverage amount. Early-stage cancers, angioplasty, and less severe conditions often pay a partial benefit — commonly 10–25% of the sum insured — and may reduce the remaining coverage.
How many conditions do critical illness policies cover?
Comprehensive Canadian critical illness policies cover roughly 25 conditions, including cancer, heart attack, stroke, multiple sclerosis, kidney failure, major organ transplant, and paralysis. The exact list and definitions vary by insurer and materially affect whether a claim is payable.