You got sick or were in an accident and now the costs are adding up: the ambulance, medication, crutches... To make things worse, you have to stop working for several weeks.
How can you protect yourself against the financial problems that can result from illness or accident? Medical insurance, disability insurance, salary insurance - here's a short guide to help you figure it all out.
Categories of Illness and Accident Insurance
There are two illness and accident insurance plans: public plans and private plans.
The federal and provincial governments provide basic coverage in the case of an accident or illness. Public insurance covers hospital care, the fees of health professionals and prescription drugs, among other things.
Here are a few examples of government programs providing coverage in the case of illness or disability:
- the Régie de l'assurance maladie du Québec (RAMQ) public health insurance plan
- the Commission des normes, de l'équité, de la santé et de la sécurité du travail du Québec (CNESST) workers' compensation program
- the Retraite Québec pension plan (QPP)
Important! The rest of this article does not discuss the public insurance plans.
It can be a good idea to get private insurance if possible since the public plan only applies in certain situations and only provides basic coverage.
Private insurance can be taken out individually or offered as part of a group plan at your work.
The coverage provided by private accident and illness insurance often varies from one contract to another. Private insurance covers certain expenses that are not covered by public plans or that are only partially covered by public plans. Here are some examples of expenses that might be covered by private plans:
- prescription drugs
- costs relating to a hospital stay
- certain prostheses (for example, an artificial limb)
- ambulance charges
- certain medical care such as physiotherapy and osteopathy
Accident and illness insurance can also include disability insurance, also known as wage replacement insurance. This insurance covers you against a loss of income caused by an accident or illness that prevents you from working.
You can also ask for private insurance for special protection in the case of a serious illness, such as cancer or a heart attack. This is sometimes called "critical illness insurance" or "catastrophic illness insurance".
Steps to Take to Get Private Accident and Illness Insurance
Choose the Person to Be Insured
You can take out accident and sickness insurance for yourself or another person. If you take it out for someone else, you will be called the "policyholder" and the other person covered by the insurance will be called the "insured".
If you take out insurance for another person, you must first get that person's written permission. However, this permission is not necessary in the case of a person in whose health you have an interest, such as the following people:
- your spouse
- your child or your spouse's child
- your grandchild or your spouse's grandchild
- your father or your mother
- one of your grandparents
- a person who contributes to your support or education
- your employee
- another person whose life or health presents a financial interest for you (such as a business partner) or an emotional interest (such as a close friend)
Choose Who Will Get the Insurance Payments
You can choose one or more "beneficiaries" of the insurance, that is, the person or persons who will receive the insurance payments if the insured is the victim of an illness or accident.
You are free to choose the person who will be the beneficiary of the insurance. You can be the beneficiary yourself, and you can even choose a person who doesn't exist yet, such as your "future child".
Insurers generally require that the beneficiary have a relationship with, or some kind of interest in the insured.
If no beneficiary is indicated in the insurance contract, it is the person who entered into the contract (the "policyholder") or his heirs (people who will inherit from the policyholder) who can receive the insurance payments.
Changing the Person Who Will Get the Insurance Payments
In theory, you can change the beneficiary or beneficiaries under your accident and sickness insurance contract. All you have to do is notify your insurer of your decision in writing.
However, there are two situations where you must get permission from the current beneficiary before making this change:
- when the contract says that the "designation of the beneficiary is irrevocable" (cannot be changed)
- when the current beneficiary of the insurance is your married or civil union spouse, unless the designation is indicated as being "revocable" (can be changed)
It is always possible to change a beneficiary that you identified in your will. You don't need this person's permission, even if you find yourself in one of the two situations mentioned above.
Declaring the Insured Person's True State of Health
In your first application for insurance, you must declare the insured's true state of health. This could therefore be your own state of health if you are the beneficiary, or that of the person you want to insure.
You must answer the insurer's questions truthfully and to the best of your knowledge. This means that you must not lie or hide important details, such as the fact that you smoke or that you already had a heart attack.
If you do not declare the insured's true state of health, the insurer could ask a court to cancel your accident and sickness insurance.
Important! As soon as the insurance begins to cover you, you are no longer required to notify the insurer if the insured's state of health changes.
Declaring the Insured Person's Work-Related Risks
In your first application for insurance, you must declare the insured's work-related risks that could affect his health. This is what is called "occupational risk". This could be, for example, the fact that the insured works on an assembly line and continually repeats the same movements.
Once the insurance has started to cover you (see below), the amount of coverage and what it costs can be changed if the "occupational risk" changes for a six-month period or longer. It can therefore be a good idea to notify your insurer of this kind of change.
Declaring the Insured Person's True Age
In your first application for insurance, you must declare the insured's true age. This might be your true age or that of someone else you want to insure.
If the age you give is not the insured's true age, the insurer can change the following:
- the amount of the insurance coverage by establishing the difference between the cost you paid for the insurance and what you should have paid based on the insured's true age
- the cost of the insurance based on the insured's true age
It is therefore possible that the coverage decreases or that the cost of the insurance increases, depending on the insured's true age.
When Coverage Begins
Your accident and sickness insurance normally begins to cover you when you receive your insurance policy, which is the paper copy of your insurance contract.
If the insurer accepts your application without changes or conditions, it can also give your insurance policy to one of its representatives, who must then give it to you. In this case, your insurance begins to cover you as soon as the representative receives it.
Paying for Insurance
The money you have to pay your insurer to benefit from accident and sickness insurance is officially called "premiums". They vary depending on the type of insurance (disability, serious illness, etc.), what is covered and as well as the amount of possible insurance payments and any deductible. A deductible is an amount that the insurance does not cover and that you have to absorb.
You must pay the premiums at the time indicated in the insurance contract. If you do not pay your premiums, the insurer can cancel your insurance after giving you at least 15 days' written notice.
Receiving Insurance Payments
If one of the events mentioned in the contract occurs, such as an illness or an accident, the policyholder, the insured or the beneficiary must:
- within 30 days of the time he became aware of the event, send the insurer a notice about the event,
- within 90 days of the time he became aware of the event, give the insurer all the information he has about what happened. This is often a medical report or the insured's medical record.
Note: The insurance policy might provide for longer deadlines, which is to your advantage.
After receiving the notice and information, the insurer has 60 days to pay the beneficiary.
However, if the insurance covers the loss of salary caused by a disability (an injury or illness preventing the person insured from working), the insurer must pay the indemnity:
- 30 days after receiving the notice and information
- if the contract provides for a grace period (that is, a waiting period before the beneficiary gets any insurance payments), 30 days after the end of this period.
Normally, insurance does not cover all the costs related to an illness or accident. In addition to providing for the maximum amounts over and above which you will not be reimbursed, the insurance contract can require that you:
- pay a certain amount of money before being entitled to a reimbursement (this is what is called a "deductible"), and
- pay a certain percentage of your expenses. For example, the insurer could limit itself to reimbursing 80% of what you paid.
The End of Coverage
An accident and illness insurance contract ends and stops covering the insured at the time indicated in the insurance contract or at the time agreed on later with the insurer.
It also ends if you don't pay your premiums despite the 15 day notice the insurer has sent you.
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.