How Is “Critical Illness Insurance” Different From “Disability Insurance”?

Critical Illness Insurance vs. Disability Insurance

When trying to understand different types of insurance, it is easy to get confused. One of the most difficult distinctions to make is the difference between “critical illness insurance” and “disability insurance”.

Critical Illness Insurance

  • Is not based on your inability to work.
  • Can be purchased through an insurance agent as a private policy or provided as part of a benefits package.
  • Is meant to protect against costs if you are diagnosed with a critical illness.
  • Generally provides a lump sum payment as specified in the policy if you are diagnosed with an illness, even if you make a full recovery.
  • Critical Illness policies typically have a survival period, or waiting period, that specifies a length of time you must wait after receiving a medical diagnosis to collect a critical illness benefit from the insurance company. This period is typically 30 days, but can vary from one policy to another.
  • Does not require any ongoing proof of loss of income, and is not affected by any other income you make.

Disability Insurance

  • Depends solely on your inability to work
  • Is meant to pay a portion of your income in the event that you cannot work.
  • Pays out a monthly benefit instead of a lump sum, usually a percentage of what you earned before becoming disabled.
  • Requires an ongoing proof of loss of income, and can stop when you are back to work and earning money.

The fundamental difference between critical illness insurance and disability insurance is that the benefits do not hinge on your inability to work, but rather on the diagnosis of one of the policy-listed illnesses, which include but are not limited to:

  • cancer, heart attack, organ transplant, paralysis, permanent disability, and many others.


  • Most critical illness policies have a detailed description of the type of illnesses or conditions that will qualify for the payment. Being disabled from gainful employment may not be relevant to entitlement to a payment under a Critical Illness policy. Each policy has specific terms and conditions, which must be reviewed very carefully by an experienced lawyer.

What Factors Do The Insurance Companies Use To Determine If You Are Eligible To Receive Critical Illness Benefits?

Under most policies, a critical illness is one that results in the loss of independence.

  • Cancer, stroke, heart attack, heart surgery, kidney failure, organ transplantation, brain tumour, paralysis, coma, permanent disability, Alzheimer's, Parkinson's diseases, and multiple sclerosis may qualify you.

However, the definitions of what constitutes a critical illness are often challenged by insurance companies, and can result in a critical illness claim being denied. This is where Share Lawyers can help!

What If My Critical Illness Is Not On The List Of Illnesses Covered By My Policy?

If your diagnosed illness is not included on the policy list, your claim may be denied by the insurance company. This may give you grounds for a case, and an experienced lawyer should be consulted to determine if you have grounds to proceed with litigation to try and receive the benefits that were denied.

The wording in criticalillness policies is often confusing – not as simple as sales agents make it sound when the policies are sold.

When you purchased your critical illness policy, you were likely asked to fill out extensive health forms before the insurer approved you for coverage.

You may now have made a claim for critical illness benefits, only to receive a denial letter from the insurance company because they are either requesting confirmation of your previous medical health, or accusing you of non-disclosure of information.

The insurance company will only pay your lump sum benefit after going through a full background check of the medical records you had originally provided them. This may include requesting further evidence from your doctor to validate your records. If they have any reason to believe that the information you provided was inaccurate, or that you withheld certain medical conditions from them (whether inadvertently or not) they will deny you based on the grounds of non-disclosure.


  • Sometimes, even a medical condition you failed to disclose that has nothing to do with the condition you put in a claim for could be enough reason for insurers to deny you.
  • Insurers reason that they may not have approved you for coverage if they had known about the medical condition you failed to disclose.
  • It is important to disclose your entire medical history when purchasing critical illness to avoid problems in the future.

If you have been denied your critical illness benefits due to alleged non-disclosure of information, Share Lawyers can determine whether you have been wrongly denied.

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