How does Critical Illness Insurance differ from Disability Insurance in Canada?

Critical Illness Insurance and Disability Insurance are designed to address different types of financial risk.

Critical Illness Insurance typically pays a one-time lump sum if you are diagnosed with a covered condition and meet the policy’s requirements. The funds can generally be used for any purpose, such as covering medical expenses, reducing debt, or taking time away from work.

Disability Insurance is designed to replace a portion of your income if an injury or illness prevents you from working. Benefits are usually paid monthly after a waiting period and continue only while you remain unable to work, subject to the terms of the policy.

Because they address different risks, these two types of insurance are often used together rather than as substitutes.