Jul 10, 2026
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Provincial health insurance will cover your oncologist, cardiac surgeon, or hospital stay after a stroke. But it won’t cover your mortgage, your childcare costs, the lost income while you’re off work, or the cost of having to travel for treatment. And it certainly won’t pay for your family’s groceries while you’re too sick to earn a paycheque.
That’s the financial gap critical illness (CI) insurance is designed to fill. Yet most Canadians have never purchased it, and very few understand how it works. According to a 2025 Ipsos poll conducted for RBC Insurance, 91% of Canadians don’t have critical illness coverage, and nearly one in three say their savings would be exhausted within six months if a serious diagnosis forced them to take time off work.
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The Canadian Cancer Society, Statistics Canada, and the Public Health Agency of Canada estimate that 696 Canadians will be diagnosed with cancer every day in 2026. That’s roughly 254,100 new cases over the course of the year. Add heart attacks and strokes, which together with cancer account for the vast majority of CI insurance claims, and the financial risk facing working Canadians is downright sobering.
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What critical illness insurance does and doesn’t pay for
Critical illness insurance pays a tax-free lump sum directly to the policyholder after a covered diagnosis. That’s it. There’s no list of approved expenses, no receipts to submit, no insurer second-guessing how you spend the money. You can use it for rent, a mortgage payment, private nursing care, experimental treatment abroad, or groceries.
That said, CI insurance is not disability insurance, which replaces a portion of your monthly income for as long as you can’t work. Nor is it health insurance, which covers prescriptions, dental, or paramedical services. And it is not life insurance, which pays your beneficiaries after you die. CI insurance pays you, while you’re alive, so you can make financial decisions without a diagnosis driving them.
The RBC Insurance poll found that only 26% of Canadians know that CI insurance is such a flexible benefit. In other words, roughly 3 in 4 don’t understand the product well enough to decide whether they need it. And, according to the poll, that’s one of the main reasons people don’t buy it.
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Cancer, heart attack, stroke: the conditions covering most CI claims
Most critical illness policies in Canada cover a core list of 25 or more conditions, with cancer (excluding certain early-stage cancers), heart attack, and stroke accounting for approximately 80% of all claims.
One detail many people overlook is the survival clause. Most Canadian policies require you to survive for 30 days after receiving a covered diagnosis before the benefit is paid. In other words, CI insurance is designed to help people who survive a serious illness and now face months of treatment, recovery, and financial disruption, rather than provide immediate emergency benefits.
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Statistics Canada’s 2021 Canadian Community Health Survey found that 45% of Canadians were living with at least one major chronic condition, including heart disease, stroke, cancer, diabetes, or high blood pressure. Based on our current population, that’s roughly 18.5 million Canadians. While CI insurance won’t include many chronic illnesses, it certainly strengthens the case for coverage.
How much does critical illness (CI) insurance cost?
CI premiums depend on your age, health, smoking status, and the amount of coverage you choose. PolicyMe’s published 2026 pricing shows that a healthy 35-year-old non-smoker in Ontario can expect to pay about $37 per month for $100,000 of coverage on a 15-year term. Across the market, critical insurance rates in Canada typically range from $10 to $40 per month.
Putting this into perspective, $37 a month is less than many Canadians spend on streaming subscriptions, yet it protects against a financial setback that could easily reach six figures if you’re unable to work during treatment.
Not surprisingly, CI premiums increase significantly with age and smoking status. Someone who waits until age 50, particularly if they’re a smoker, could pay several hundred dollars each month for similar coverage. That’s why advisers often recommend buying CI insurance while you’re young and healthy, ideally before age 40 and certainly before a health issue affects your insurability.
I should note that employer-sponsored group coverage is often less expensive than buying an individual policy.
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CI insurance vs. disability insurance
A common source of confusion is the relationship between CI insurance and long-term disability (LTD) insurance. They are not the same.
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LTD insurance replaces a portion of your income, usually 60% to 70%, for as long as you remain unable to work due to illness or injury, though it may be time-limited depending on the policy. CI insurance pays one lump sum immediately after diagnosis and survival, regardless of whether you return to work. A patient who gets diagnosed with breast cancer in March, takes four months off for chemotherapy, and returns to work in August would likely receive no LTD payout, as the absence may fall below the qualifying period. But they could receive $100,000 or more from a CI policy, depending on the coverage amount.
For Canadians without strong emergency savings, holding both forms of coverage offers the most complete financial protection. For those on a budget, a financial adviser can help model which gap, the immediate cash need or the longer income replacement, is larger given their specific situation.
Protect your income, whatever life throws at you. A serious diagnosis or unexpected injury shouldn't put your life on hold. To help, compare disability or critical illness coverage from insurance providers. Or use the free, no-obligation, online tool from PolicyAdvisor. Instantly compare critical illness and disability quotes from Canada’s top insurance providers and find the right safety net for your budget. Compare quotes online with PolicyAdvisor
What to look for in a CI policy before you buy
Provincial health care plans provide vital financial protection for Canadians, but they were never designed to replace your income, cover caregiving costs, or help you keep up with mortgage payments during months of treatment. That’s where critical illness insurance fits in.
If you’re considering a policy, there are a few features worth reviewing before you apply:
- Look for coverage that includes at least 25 medical conditions. Some policies may cover 30 or more, reducing the chance that a serious diagnosis falls outside the policy.
- Confirm the survival period. Most Canadian policies use a standard 30-day survival clause, but it’s worth checking before you buy.
- Consider whether a return-of-premium (ROP) rider makes sense. It increases the premium but may refund your premiums if you never make a claim.
- Be completely honest about any pre-existing medical conditions. Failing to disclose them could void a future claim.
- Compare your employer’s group coverage with individual policies. Group plans are often less expensive, but individual policies usually stay with you if you change jobs.
With nearly 700 Canadians receiving a cancer diagnosis every day and almost one in three households saying their savings wouldn’t last six months after a major illness, critical illness insurance is less about preparing for the worst and more about protecting your financial options if life takes an unexpected turn. Having coverage in place before you need it could make one of life’s most challenging moments less stressful.
Survey methodology
The Ipsos poll was conducted on behalf of RBC Insurance in October 2025, in English and French. Full methodology details, including sample size and margin of error, are available at rbcinsurance.com.
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Colin Graves is a Winnipeg-based financial writer and editor whose work has been featured in publications such as Time, MoneySense, MapleMoney, Retire Happy, The College Investor, and more. Before becoming a full-time writer, Colin was a bank manager for over 15 years.
