Disability Insurance versus Critical Illness Insurance

Posted on April 10, 2009 and updated March 19, 2019 in Life Insurance Canada News 2 min read

Disability Insurance and Critical Illness share some similarities. Unlike life insurance both policies are payable to the insured rather than the insured’s beneficiary.

However, they also have several differences which are often misunderstood by consumers and many brokers. The primary difference is the way in which the proceeds are paid.

Disability insurance pays a monthly income whereas Critical Illness insurance pays a lump sum payout.


Other differences include:

  • Disability is related to insured ability to work. Critical illness insurance is related solely to the diagnosis of a specific illness

  • Disability insurance generally ends at 65. Critical Illness insurance can be maintained for the insureds lifetime.

  • Disability insurance premiums are partially based on occupation class. The insured occupation is not a variable in critical illness pricing.

  • Family history has a more significant impact on critical illness pricing.

  • An inflation protector rider is available on disability insurance. This rider is unavailable on critical illness policies.

Your insurance advisors ability to understand these differences will guide his/her ability to provide prudent advice.

I would happy to discuss your particular situation please feel free to contact me at 1.866.899.4849

Life Critical Illness
Life Critical Illness

In the UK these policies are known as income protection and critical illness cover and people are just as confused here too. A lot of people think that they should just choose one type of cover but actually they work well together. Critical illness lump sum can pay off your mortgage or provide you with money for medical expenses. Income protection/disability insurance then provides you with an on-going standard of living