Group Critical Illness Insurance

Traditional Group Limitations
Traditionally, Group Critical Illness Insurance (GCII) plans have offered poor definitions, few options, limited coverages and were seldom convertible or portable. Many plans could not be purchased on a stand alone basis. They could only be purchased in conjunction with other benefits, whether you wanted them or not. Several plans had very severe provisions attached to the Cancer moratorium period, actually terminating your entire plan if you were unfortunate enough to contract Cancer during that period.

Many advisors have been reluctant to recommend GCII to clients over concerns that inferior definitions might result in an abnormal number of rejected claims, causing them to lose clients and possibly face lawsuits.

VitalCheque Summarized
VitalCheque has changed all that.  By combining features normally only found in individual products with a group format, VitalCheque offers the very best coverages, options, flexibility, portability and definitions all at affordable prices on a stand alone basis.

Definitions of Covered Events
The single most important consideration when purchasing GCII is the strength of the definitions’ wordings.  Definitions determine when and if you will be paid.  A 2004 industry survey of individual policies discovered that 38% of denied Critical Illness insurance (CII) claims resulted from an event’s failure to satisfy the policy’s covered condition definition.

The wording of a covered condition should be medically and legally sound. An example can be seen in some plans’ Cancer definition. One definition states “Cancer is a malignant tumour characterized by uncontrollable growth and spread of malignant cells and the invasion of tissue.”  That definition doesn’t cover “Leukemia” or “Hodgkin’s Disease”, as neither is a tumour.  Can you imagine contracting either of those types of Cancer only to find out you’re not covered?

A definition can also create confusion at time of claim if its wording is not legally precise.   If a policy’s transplant definition states “both kidneys”, this wording could cause a problem.  We all know you can survive with one kidney. But, consider the dilemma if an insured is in a car accident severely damaging a kidney so that it has to be removed and several years later contracts a virus which causes their remaining kidney to fail and require a transplant. The definition states “both kidneys”.  Such a dilemma has been avoided by VitalCheque as the definition simply states “a kidney”.  This is only one of many examples of problems that can be caused by poor definitions of covered conditions to eliminate unwelcome surprises at claim time.

Unilateral Termination & Claim Denial
All GCII plans have elimination or qualifying periods which must be satisfied before a covered condition’s benefit is paid.  However, imagine how devastating it would be to have your claim refused; and, to also have your complete coverage cancelled at a time when you would be unable to obtain any other CII protection?

Well, with some plans that risk exists.  Once your plan is activated you might think everything is fine; but, not necessarily. Should you be diagnosed with Cancer, a claim within the first 90 days after your plan was put into effect, some plans will deny a Cancer claim and also terminate your coverage.  It’s bad enough to be stricken with Cancer and not receive a benefit because of the initial qualifying period; but, to have coverage cancelled could be devastating, since you would now be uninsurable and unable to obtain any alternative CII policy.

Whatever you do, don’t simply read a list of covered conditions and think that you are covered upon the diagnosis of any of the events listed.

Unusually Restrictive Conditions
There can be very significant differences in claim payment procedures amongst GCII plans.  One example is Parkinson’s Disease.  Parkinson’s Disease is a condition that is definitely diagnosed and the usual symptoms are: muscle rigidity, tremors and bradykinesis (abnormal slowness of movement, sluggishness of physical and mental responses).  With a definite diagnosis and those accompanying symptoms, you would expect a claim to be paid after mandatory thirty day survival period; but not so with all plans.

Some plans go beyond the normal symptoms and confirmed diagnosis by requiring you be unable to perform two or more activities of daily living.  This additional restriction means that even though you have Parkinson’s disease you will not receive a payment until such time as you have deteriorated to a state which may require institutionalized care.   Who knows how long the wait will be?  Your wait could be years, or you might even die before qualifications are met.

A severe definition is one of the many means by which a carrier’s risk can be reduced or delayed.  It’s bad enough receiving news that you’re ill; the last thing you want is a delayed, or possibly a denied, claim payment.


Group vs. Individual Approval Process
There are a great many positive features regarding GCII.  One of the main differences between GCII and individual CII is the approval process.  Individual CII has a very stringent underwriting, or acceptance process which involves your health as well as your immediate family’s health history.  Your current medical condition is verified by tests and your prior health by medical reports.  Your lifestyle is put under a microscope and everything is examined.  Some of the factors taken into consideration are:  your occupation, personal habits such as use of tobacco, alcohol and drugs, driving record and foreign travel plans.  In addition to this scrutiny, the medical histories of your parents and siblings are examined.  An otherwise healthy individual might be charged extra, be subject to exclusions or possibly even be denied coverage solely based on the medical history of their parents or siblings.

GCII doesn’t subject the applicant to such a rigorous acceptance process.  True groups, with mandatory participation, automatically grant acceptance to all eligible employees.  Voluntary or optional group applicants must complete a simplified underwriting process which is usually comprised of written statements and questions.

“Gate Keepers” 
Before claim benefits are paid, an insured must satisfy the plan’s definitions; however, there are three additional provisions that are taken into consideration at claim time.  The first is limited to Cancer and is referred to as the Cancer moratorium period.  If Cancer or symptoms, eventually leading to the diagnosis of Cancer, manifest within the initial 90 days from the plan’s effective date then no benefit will be paid and in some plans coverage will be terminated. Most covered conditions require a 30 day survival period after the event and that applies to Cancer after the initial 90 moratorium period has expired.

Another provision for GCII is the “pre-existing condition” limitation.  Assuming the pre-existing condition limitation is “24/24” months, then coverage for a covered condition would be excluded and a claim denied if the insured suffers a covered condition within the 24 month period prior to enrolment in the GCII plan and subsequently experienced the same condition within 24 months after the coverage’s effective date.

“First occurrence limitation” is a restriction that applies when an insured has suffered a covered condition less than 5 years prior to the plan’s effective date and a recurrence of that condition occurs after the plan’s effective date and within 5 years of its first occurrence.  A claim would be honoured only if an insured had been symptom free and not receiving any treatment during the five year period between the initial event and the recurrence.

Choice of Plans
VitalCheque offers two plans, Standard and Enhanced, for regular groups.  The Standard plan offers 5 basic coverages, including the big three:  Cancer, Heart Attack and Stroke.  This plan is obviously the least expensive.  The Enhanced plan provides 24 covered conditions, or 31 if listed individually.

Convertibility & Portability
In addition to its many other attractive features, VitalCheque provides a convertibility provision for regular Group plans and a portability provision with its Optional Group plans.  These features are extremely attractive because an employee can now be assured their coverage will remain in force if they change jobs, regardless of any changes in their health.

VitalCheque is now providing affordable CII coverage to many who would otherwise find individual plans too expensive. Individuals, who would normally be rated, receive exclusions or declined for individual plans, due to poor personal or family medical history will be able to receive excellent coverage under a VitalCheque group plan. Under present legislation, GCII enjoys a unique status.  An employer can pay and expense premiums for a GCII plan and the premiums are not reportable as a “taxable benefit” by the employees; however, in the event of a claim the benefit is received tax-free.  This special feature is an ideal tool for corporations to use for employee retention.        


Remember to always read the policy so you are aware of the Exclusions, Limitations, and Restrictions and understand the definitions of the covered conditions.

The opinions expressed above are based entirely from extensive discussions and research conducted by Horizon Planning Group Inc., a VitalCheque agent & MGA and GCI Services Inc.  This information is provided for general information. Although every effort has been made to ensure the accuracy of the information contained in this website and attached documents, Horizon Planning Group Inc.  nor  GCI Services Inc. is not liable for errors or omissions.  Reproduction of the documents, exactly as is without any changes, is permitted.  However changes or alterations to this document either in whole or part are expressly prohibited.   
Copyright 2012 – Horizon Planning Group Inc.

Kyle Dunn,
Nov 25, 2008, 8:06 PM
Kyle Dunn,
Nov 26, 2008, 12:11 PM
Kyle Dunn,
Nov 25, 2008, 8:25 PM