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Critical illness: a cheque at diagnosis, not a form

Cancer, heart attack, stroke: one owner in three will face one before retirement. Critical illness pays a lump sum 30 days after diagnosis, with no disability condition — to get treated, get replaced and stay the course.

  • Tax-free lump sum
  • 25 covered conditions (per contract)
  • Corporate ownership with return of premium
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YOUR REQUEST, MADE SIMPLE

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Which coverage interests you?

You:

Business critical illness

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SOMMET PROTECTIONWhat matters deserves our full attention.
The issue

A critical illness does not always stop you working long enough to trigger disability, but it upends everything: private treatments, travel, reduced hours, the need for a right hand. The business needs immediate financial flexibility.

Partners reviewing a plan at a desk with laptops

The solution

  1. 1

    A lump sum

    Typically $100,000 to $2M, paid at diagnosis of a covered condition after the survival period (usually 30 days), used freely.

  2. 2

    Company ownership

    The company pays and receives the capital to fund replacement, cash flow or a share buyout in case of disability.

  3. 3

    Return of premium

    If no claim is made, the return-of-premium option at expiry or cancellation refunds premiums paid — a strategy shareholders favour.

  4. 4

    Complement to key person

    Key person covers death; critical illness covers survival, which is more frequent.

Typical case (illustrative)

A 45-year-old entrepreneur has his company buy $250,000 of critical illness with return of premium at 65. A cancer diagnosis at 52 pays $250,000 tax-free to the company; with no claim, premiums are refunded at 65.

Illustrative: covered conditions, definitions and options vary by insurer. The contract prevails.

Who it is for

  • Active owners and shareholders
  • Self-employed workers without a group plan
  • Complement to shareholders' agreements (disability through critical illness)
  • Businesses wanting to retain a key executive (taxable benefit to structure)
Free analysis, no obligation

A diagnosis shouldn't decide your business's future

The advisor compares definitions, number of covered illnesses and return-of-premium options from several insurers, for you and your key people.

Compare contracts

Critical illness and disability: complementary, not interchangeable

Trigger
Disability insuranceInability to work, after a waiting period.
Critical illness insuranceDiagnosis of a covered illness, even if you keep working.
Payout form
Disability insuranceMonthly, as long as the disability lasts.
Critical illness insuranceLump sum, one payment, 30 days after diagnosis.
Use
Disability insuranceReplace income.
Critical illness insuranceUnrestricted: care, replacement, debt, spouse's leave, business reserve.
Return of premiums
Disability insuranceRare.
Critical illness insuranceCommon option: premiums refunded if no claim.

Common mistakes

  • 01

    Choosing a 3- or 4-illness contract

    Comprehensive contracts cover 25 illnesses or more and often include early-stage cancers as a partial benefit. Read the definitions.

  • 02

    Confusing it with group insurance

    Group coverage disappears with the job or the sale of the business; an individual contract follows you.

  • 03

    Overlooking corporate ownership

    A company-owned policy with a return-of-premium option can have advantages — to be structured with your accountant.

Points to consider

  • Medical definitions (e.g., cancer stage) determine payment: read them carefully.
  • Survival period and exclusions (pre-existing, early cancers) to understand.
  • The return-of-premium option raises the premium: corporate ownership taxation must be validated.
  • Premiums rise with age at purchase: earlier = cheaper.

The solutions presented are for information only and rely on current Canadian and Quebec tax legislation, which may change. Sommet Protection gives no financial, tax or legal advice: the analysis is done by a partner financial security advisor, together with your accountant and legal advisors.

Frequently asked questions

How does it differ from disability insurance?

Disability replaces monthly income while you cannot work. Critical illness pays a single amount at diagnosis, whether you work or not. The two complement each other.

Can the company deduct the premium?

Generally no. The capital is received tax-free by the company; flowing it to the shareholder is planned with the tax specialist.

Guide · 11-minute read

Protecting the business you built: the insurance guide for owners and the self-employed

The five risks that close profitable SMEs, and how to fund them for a fraction of their cost.

Read the guide
  1. 8 chapters
  2. 1. You are the most important asset — and the least insured
  3. 2. A partner's death: the scenario that divides families
  4. 3. Disability: three protections, three different roles
  5. 4. The key person worth 30% of revenue
  6. 5. Debts, guarantees and lenders
  7. 6. Tax at death on shares: the founders' file
  8. 7. A health plan for your incorporated company
  9. 8. Where to start

The solutions

Let's talk about your business

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