Understanding Children’s Critical Illness Insurance

Having a child with a critical illness can take both an emotional and financial toll. Having a critical illness policy on your child can give you the peace of mind that if your child become seriously ill, you would have the financial resources to care for them.

What You Need to Know

What is Child Critical Illness Insurance

Critical Illness insurance provides a lump sum payment to the policy owner (e.g. the parents) in the event that the insured person on the policy is diagnosed with one of the critical illnesses covered by the policy.  This usually includes life threatening cancer, stroke, acquired brain injury, major organ failure, and a number of other conditions. However, a child policy covers 5 childhood illnesses as well.  This include:

  • Cerebral Palsy
  • Congenital Heart Disease
  • Cystic Fibrosis
  • Muscular Dystrophy
  • Type 1 Diabetes Mellitus

Child Critical Illness Insurance can either be bought as a stand-alone product or as a rider on another insurance policy.  Children can be insured on these types of policies between the age of 30 days and 17 years old.


There are a variety of benefits to having a critical illness policy on your child, the biggest being the financial relief it provides if you need to make a claim.

  1. Critical Illness Insurance can provide you with money to cover medical treatments that may not be covered by the province you live in.
  2. The extra money can give you the ability to take time off of work without financial burden.
  3. Insurance proceeds can assist with the many non-medical costs of having a child who is ill.  This can include hotels, taxis, parking, meals etc.
  4. Funds could be used to pay for in home care, as well as any accessibility improvements that your home or vehicle may need. 
  5. Premiums tend to be low and are typically guaranteed.  If your child does not develop a critical illness, the policy can often be transferred to them as adults to provide them with the same important coverage.

Case Study

John and Jane’s son, Sam, was recently diagnosed with Type 1 Diabetes Mellitus.  While his blood sugars are getting under control, it is not uncommon for Sam to stay in the hospital for up to a week at a time.   Jane has been forced to take unpaid time off of work as they have to travel nearly 2 hours to their nearest children hospital for appointments and she stays with Sam when he has overnight stays.  Sometimes they have multiple appointments in a week and find it easier to stay at a hotel for next day appointments.  This also means they are eating out for every meal.  It is not uncommon for John and Jane to spend upwards of $1,000 a week just for traveling expenses.

The good news is John and Jane purchased a $50,000 Critical Illness policy for Sam when he was an infant.  They were able to make a claim on the policy and received a lump sum payment of $50,000.  Jane doesn’t have to worry about taking time off of work and paying for travelling and overnight expenses.  This family rests assured that they can afford to give Sam the best care possible without draining their savings and retirement accounts.

The Bottom Line

Please feel welcome to contact us to learn more about the details for child critical illness policies and what options may work best for your family situation.

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This information is designed to educate and inform you of financial strategies and products currently available. As each individual’s circumstances differ, it is important to review the suitability of these concepts for your particular needs with a Qualified Financial Advisor.