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Difference Between Life Insurance and Accidental Death Coverage

You want to know your loved ones are financially secure in the event of your death, but what kind of insurance will best protect them? There are two broad categories of insurance plans that offer Canadians end of life protection: life insurance and accidental death insurance. Often, these products are thought of interchangeably, but each comes with distinct features and benefits designed to suit specific needs. 

It’s important to understand the difference so that you can choose the policy that’s the right fit. To help you make the best decision for your family’s future, we’ve outlined the differences between life insurance and accidental death coverage and how they can provide you with the peace of mind you and your loved ones deserve.

Key takeaways

  • Both life insurance and accidental death insurance helps provide peace of mind by ensuring that your family will be looked after financially in the event of your death.
  • These two types of insurance products are often viewed as interchangeable when in fact, they’re different in important ways that policy holders need to understand.
  • Life insurance pays out a death benefit when death occurs for a variety of reasons (e.g. accident, illness, or old age) so long as the policyholder dies while their policy is still active.
  • Accidental death insurance pays out benefits only if the policyholder dies in an accident or dies within one within one year from injuries caused by an accident only. 
  • Accidental death insurance is often more affordable and charges lower premiums due to its limited scope of coverage.

What is life insurance?

Let’s start with an overview of life insurance and why it might be the right option for long-term coverage and financial security for your loved ones. Life insurance provides a one-time, tax-free payment in the event of your death. However, life insurance products aren’t one-size-fits-all solutions — they’re tailored to suit your budget and your goals.

Types of life insurance

Canadians have access to both term life insurance plans and permanent life insurance. Here’s how they differ:

  • Term life insurance:  This is a type of life insurance that provides you with coverage over a defined period decided upon when you purchase your plan. Term life insurance policies can range from 10 to 40 years, depending on your needs. The beneficiaries named in the policy (your family and loved ones) receive a death benefit payout if the policyholder dies within the term protected by the policy’s coverage.
  • Permanent life insurance: Permanent life insurance plans also offer death benefit payouts to beneficiaries, but they are not limited to a specific term. One way to think about the difference is that term life insurance policies offer a death benefit if you die (during the insured term) while permanent life plans provide death benefit payouts when you die, regardless of when that occurs. While premiums are typically higher on permanent life insurance plans, some may offer a stream of money that accumulates in the policy as you pay your premiums.

Key features of life insurance coverage

The must-know basics behind life insurance and the key features that this kind of coverage offers are:

  • Coverage is comprehensive: Your life insurance plan covers death due to illness, natural causes, or accidents (limitations may apply).
  • Policies are customizable: Talking to your advisor will help you tailor a plan to fit your specific needs. For example, you may wish to include riders that cover you in the case of critical illness or disability.
  • Certain policies offer a cash value component: Some permanent life insurance policies build cash value over time and give you the option to either withdraw funds from this component of your plan or borrow against its value.
  • Benefits are typically tax-free: In most cases, death benefit payouts are not subject to income tax.

What is accidental death coverage?

Accidental death insurance — also referred to as Personal Accident insurance — is a type of coverage that provides your beneficiaries with a payout in the event that you die from an accident. Coverage is limited to these specific situations but is also more affordable than a life insurance policy. For RBC clients between the ages of 18 and 69, acceptance into a Personal Accident insurance policy is guaranteed.

Key features of accidental death coverage

Here’s what you need to know about accidental death coverage:

  • Coverage is accident-specific: Beneficiaries will only receive a death benefit payout in the event of accidental death or if you die within one year from injuries caused by an accident only. 
  • This type of insurance is often purchased as supplemental coverage: Accidental death policies are often purchased as a rider to a life insurance policy, but can be purchased as a standalone plan.
  • Plans offer lower premiums: Because the coverage offered by accidental death insurance is more limited and only applicable to specific situations, it’s usually more affordable than life insurance.
  • Policies do not come with a cash value component: Accidental death policies have no cash value component and are not a financial tool that helps build savings or contributes to your investment portfolio.

Key differences between life insurance and accidental death coverage

Here’s the most important differences between life insurance and accidental death coverage at a glance:

Feature

Life Insurance

Accidental Death Coverage

Scope of Coverage

Death due to any cause, including illness, natural causes, or accidents, is covered, although some exclusions may apply.

Only in the event of accidental death or if you die within one year from injuries caused by an accident only.

Premiums

The comprehensive coverage offered by these plans means that premiums are higher.

Premiums are lower due to the limited scope of coverage.

Cash Value

Some policies have components that build cash value over time.

These plans have no cash value component.

Flexibility

Policies can be tailored to the individual to include riders that offer additional coverage. Policies can also range in terms of length.

Policies only cover accidental death and injury.

Who Can be Covered

Coverage available for Canadian residents aged 18 to 70. Some policies require a medical exam for acceptance.

Coverage typically available for Canadian residents aged 18 to 69. Medical exam usually not required for acceptance.

Death Benefit Payouts

Policies offer a guaranteed payout upon death (subject to some exclusions).

Payouts are only made in the case of qualifying accidents.

Why get life insurance?

With an active term life or permanent life insurance policy, you can be assured that your loved ones will have a financial safety net when you die. These policies and plans are designed to provide short- or long-term security and can, depending on the type of policy, also contribute to wealth building.

Here are some of the reasons why life insurance could be the right kind of coverage for you and your family:

  • You’re a working parent with children or dependents: For parents and guardians with children or other financial dependents living at home, life insurance coverage provides ease of mind, knowing that if something were to happen to you, your beneficiaries will be able to cover unexpected costs like additional childcare, household bills, or funeral expenses.
  • You have sizable debts like a mortgage or student loans: If you’re making regular payments on loans, lines of credit, or a mortgage, life insurance will allow your spouse or family to continue paying off those debts without worry.
  • You’re saving to pay for your child’s education: One financial strategy for funding a child’s education beyond a RESP is to dedicate the cash value component of a permanent life policy to university or college tuition. This can be accomplished by purchasing a plan for your child and transferring it to them when they come of age.
  • You’re working to protect your assets and pass them on to your loved ones: You want your loved ones to be able to keep the things we worked hard to give them — like the family home or cottage on the lake. Your life insurance death benefit supports your beneficiaries financially so that they can afford to pay property taxes or other fees on these assets.
  • You want your family to receive a death benefit payout that won’t be subject to tax: Life insurance death benefit payouts, including the cash value component of your policy are, for the most part, not taxed when they are passed on to your beneficiaries following your death.   

Why get accidental death coverage?

Accidental death coverage offers a more affordable way to protect your family if you experience an accident resulting in death. It could be the right policy option for you and your loved ones if:

  • You’re someone who works in a high-risk industry: Certain occupations like construction, transportation, and manufacturing can put workers at higher risk of accidents or fatalities.
  • Your hobbies involve a higher chance of accident or injury: Rock climbing, mountain biking or jet skiing typically involve more risk than practicing yoga. People who love high-octane activities may want to consider accidental death insurance to protect themselves. However, it’s important to note that it may not cover every high-risk hobby. Reckless activities or activities that break the law are excluded. For example, while low altitude rock climbing might be covered by your policy, free climbing in the Alps without ropes may not. 
  • You’re a young adult who wants low-cost insurance coverage: If life insurance is beyond your budget as a young adult, a more affordable AD&D policy could be the right option for you at this stage of your life.
  • You already have a life insurance policy, but you want additional coverage: Some life insurance policy holders opt for an additional accidental death rider that provides an extra layer of security in the face of an unexpected accident.
  • You don’t qualify for life insurance: As accidental death insurance typically does not require a medical exam, it can be a good option for Canadians who cannot be approved for traditional life insurance. At RBC, acceptance into an accidental death policy is typically guaranteed if you are an RBC customer between the ages of 18 and 69 and a Canadian resident. No medical exam is required.

Why combine life insurance and accidental death coverage?

Combining life insurance with accidental death coverage provides an additional layer of security for your loved ones and offers peace of mind knowing that your family will be financially supported in the face of an accident resulting in death. Combining these two products is also a cost-effective way to obtain additional coverage because accidental death insurance can be tacked on to your life insurance policy as a rider — typically at a lower rate than if you purchased the policy separately.

How to combine life insurance and accidental death coverage

There are two ways to combine the protection offered by life insurance and accidental death coverage. Life insurance policyholders can request that an accidental death rider be added to their plan. Or, for more personalized coverage tailored to your specific needs, you can purchase a separate policy. Ask your insurance advisor for guidance on which option best suits your goals and requirements. 

Extra protection for you and your loved ones

While life insurance and accidental death coverage do share some commonalities, they are separate and different insurance products that offer you and your loved ones varying levels of protection. Life insurance offers comprehensive protection and long-term benefits, while accidental death coverage provides affordable, accident-specific protection. Your insurance advisor can help you to choose the right policy — or combination of policies — to ensure financial security for you and the people you love most.  

Frequently Asked Questions (FAQs) about Accidental Death Coverage vs Life Insurance

Is accidental death coverage the same as life insurance?

No, these are two separate insurance products that offer different levels of protection. Life insurance is a comprehensive, short- or long-term type of coverage that comes with higher premiums, while accidental death coverage is more affordable but only offers protection against specific circumstances.

If I have life insurance, am I covered if I die accidentally?

Most term and permanent life insurance plans do cover accidental death. Your insurance provider can offer you a list of potential exclusions. 

Can I have both life and accidental death coverage?

Yes. Combining these two types of coverage offers an additional layer of financial security for your family.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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You want to know your loved ones are financially secure in the event of your death, but what kind of insurance will best protect them? There are two broad categories of insurance plans that offer Canadians end of life protection: life insurance and accidental death insurance. Often, these products are thought of interchangeably, but each comes with distinct features and benefits designed to suit specific needs. 

It’s important to understand the difference so that you can choose the policy that’s the right fit. To help you make the best decision for your family’s future, we’ve outlined the differences between life insurance and accidental death coverage and how they can provide you with the peace of mind you and your loved ones deserve.

Key takeaways

  • Both life insurance and accidental death insurance helps provide peace of mind by ensuring that your family will be looked after financially in the event of your death.
  • These two types of insurance products are often viewed as interchangeable when in fact, they’re different in important ways that policy holders need to understand.
  • Life insurance pays out a death benefit when death occurs for a variety of reasons (e.g. accident, illness, or old age) so long as the policyholder dies while their policy is still active.
  • Accidental death insurance pays out benefits only if the policyholder dies in an accident or dies within one within one year from injuries caused by an accident only. 
  • Accidental death insurance is often more affordable and charges lower premiums due to its limited scope of coverage.

What is life insurance?

Let’s start with an overview of life insurance and why it might be the right option for long-term coverage and financial security for your loved ones. Life insurance provides a one-time, tax-free payment in the event of your death. However, life insurance products aren’t one-size-fits-all solutions — they’re tailored to suit your budget and your goals.

Types of life insurance

Canadians have access to both term life insurance plans and permanent life insurance. Here’s how they differ:

  • Term life insurance:  This is a type of life insurance that provides you with coverage over a defined period decided upon when you purchase your plan. Term life insurance policies can range from 10 to 40 years, depending on your needs. The beneficiaries named in the policy (your family and loved ones) receive a death benefit payout if the policyholder dies within the term protected by the policy’s coverage.
  • Permanent life insurance: Permanent life insurance plans also offer death benefit payouts to beneficiaries, but they are not limited to a specific term. One way to think about the difference is that term life insurance policies offer a death benefit if you die (during the insured term) while permanent life plans provide death benefit payouts when you die, regardless of when that occurs. While premiums are typically higher on permanent life insurance plans, some may offer a stream of money that accumulates in the policy as you pay your premiums.

Key features of life insurance coverage

The must-know basics behind life insurance and the key features that this kind of coverage offers are:

  • Coverage is comprehensive: Your life insurance plan covers death due to illness, natural causes, or accidents (limitations may apply).
  • Policies are customizable: Talking to your advisor will help you tailor a plan to fit your specific needs. For example, you may wish to include riders that cover you in the case of critical illness or disability.
  • Certain policies offer a cash value component: Some permanent life insurance policies build cash value over time and give you the option to either withdraw funds from this component of your plan or borrow against its value.
  • Benefits are typically tax-free: In most cases, death benefit payouts are not subject to income tax.

What is accidental death coverage?

Accidental death insurance — also referred to as Personal Accident insurance — is a type of coverage that provides your beneficiaries with a payout in the event that you die from an accident. Coverage is limited to these specific situations but is also more affordable than a life insurance policy. For RBC clients between the ages of 18 and 69, acceptance into a Personal Accident insurance policy is guaranteed.

Key features of accidental death coverage

Here’s what you need to know about accidental death coverage:

  • Coverage is accident-specific: Beneficiaries will only receive a death benefit payout in the event of accidental death or if you die within one year from injuries caused by an accident only. 
  • This type of insurance is often purchased as supplemental coverage: Accidental death policies are often purchased as a rider to a life insurance policy, but can be purchased as a standalone plan.
  • Plans offer lower premiums: Because the coverage offered by accidental death insurance is more limited and only applicable to specific situations, it’s usually more affordable than life insurance.
  • Policies do not come with a cash value component: Accidental death policies have no cash value component and are not a financial tool that helps build savings or contributes to your investment portfolio.

Key differences between life insurance and accidental death coverage

Here’s the most important differences between life insurance and accidental death coverage at a glance:

Feature

Life Insurance

Accidental Death Coverage

Scope of Coverage

Death due to any cause, including illness, natural causes, or accidents, is covered, although some exclusions may apply.

Only in the event of accidental death or if you die within one year from injuries caused by an accident only.

Premiums

The comprehensive coverage offered by these plans means that premiums are higher.

Premiums are lower due to the limited scope of coverage.

Cash Value

Some policies have components that build cash value over time.

These plans have no cash value component.

Flexibility

Policies can be tailored to the individual to include riders that offer additional coverage. Policies can also range in terms of length.

Policies only cover accidental death and injury.

Who Can be Covered

Coverage available for Canadian residents aged 18 to 70. Some policies require a medical exam for acceptance.

Coverage typically available for Canadian residents aged 18 to 69. Medical exam usually not required for acceptance.

Death Benefit Payouts

Policies offer a guaranteed payout upon death (subject to some exclusions).

Payouts are only made in the case of qualifying accidents.

Why get life insurance?

With an active term life or permanent life insurance policy, you can be assured that your loved ones will have a financial safety net when you die. These policies and plans are designed to provide short- or long-term security and can, depending on the type of policy, also contribute to wealth building.

Here are some of the reasons why life insurance could be the right kind of coverage for you and your family:

  • You’re a working parent with children or dependents: For parents and guardians with children or other financial dependents living at home, life insurance coverage provides ease of mind, knowing that if something were to happen to you, your beneficiaries will be able to cover unexpected costs like additional childcare, household bills, or funeral expenses.
  • You have sizable debts like a mortgage or student loans: If you’re making regular payments on loans, lines of credit, or a mortgage, life insurance will allow your spouse or family to continue paying off those debts without worry.
  • You’re saving to pay for your child’s education: One financial strategy for funding a child’s education beyond a RESP is to dedicate the cash value component of a permanent life policy to university or college tuition. This can be accomplished by purchasing a plan for your child and transferring it to them when they come of age.
  • You’re working to protect your assets and pass them on to your loved ones: You want your loved ones to be able to keep the things we worked hard to give them — like the family home or cottage on the lake. Your life insurance death benefit supports your beneficiaries financially so that they can afford to pay property taxes or other fees on these assets.
  • You want your family to receive a death benefit payout that won’t be subject to tax: Life insurance death benefit payouts, including the cash value component of your policy are, for the most part, not taxed when they are passed on to your beneficiaries following your death.   

Why get accidental death coverage?

Accidental death coverage offers a more affordable way to protect your family if you experience an accident resulting in death. It could be the right policy option for you and your loved ones if:

  • You’re someone who works in a high-risk industry: Certain occupations like construction, transportation, and manufacturing can put workers at higher risk of accidents or fatalities.
  • Your hobbies involve a higher chance of accident or injury: Rock climbing, mountain biking or jet skiing typically involve more risk than practicing yoga. People who love high-octane activities may want to consider accidental death insurance to protect themselves. However, it’s important to note that it may not cover every high-risk hobby. Reckless activities or activities that break the law are excluded. For example, while low altitude rock climbing might be covered by your policy, free climbing in the Alps without ropes may not. 
  • You’re a young adult who wants low-cost insurance coverage: If life insurance is beyond your budget as a young adult, a more affordable AD&D policy could be the right option for you at this stage of your life.
  • You already have a life insurance policy, but you want additional coverage: Some life insurance policy holders opt for an additional accidental death rider that provides an extra layer of security in the face of an unexpected accident.
  • You don’t qualify for life insurance: As accidental death insurance typically does not require a medical exam, it can be a good option for Canadians who cannot be approved for traditional life insurance. At RBC, acceptance into an accidental death policy is typically guaranteed if you are an RBC customer between the ages of 18 and 69 and a Canadian resident. No medical exam is required.

Why combine life insurance and accidental death coverage?

Combining life insurance with accidental death coverage provides an additional layer of security for your loved ones and offers peace of mind knowing that your family will be financially supported in the face of an accident resulting in death. Combining these two products is also a cost-effective way to obtain additional coverage because accidental death insurance can be tacked on to your life insurance policy as a rider — typically at a lower rate than if you purchased the policy separately.

How to combine life insurance and accidental death coverage

There are two ways to combine the protection offered by life insurance and accidental death coverage. Life insurance policyholders can request that an accidental death rider be added to their plan. Or, for more personalized coverage tailored to your specific needs, you can purchase a separate policy. Ask your insurance advisor for guidance on which option best suits your goals and requirements. 

Extra protection for you and your loved ones

While life insurance and accidental death coverage do share some commonalities, they are separate and different insurance products that offer you and your loved ones varying levels of protection. Life insurance offers comprehensive protection and long-term benefits, while accidental death coverage provides affordable, accident-specific protection. Your insurance advisor can help you to choose the right policy — or combination of policies — to ensure financial security for you and the people you love most.  

Frequently Asked Questions (FAQs) about Accidental Death Coverage vs Life Insurance

Is accidental death coverage the same as life insurance?

No, these are two separate insurance products that offer different levels of protection. Life insurance is a comprehensive, short- or long-term type of coverage that comes with higher premiums, while accidental death coverage is more affordable but only offers protection against specific circumstances.

If I have life insurance, am I covered if I die accidentally?

Most term and permanent life insurance plans do cover accidental death. Your insurance provider can offer you a list of potential exclusions. 

Can I have both life and accidental death coverage?

Yes. Combining these two types of coverage offers an additional layer of financial security for your family.

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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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Topics:

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You’ve booked the flights, locked in hotels, and packed enough sunscreen for a month in the sun. But here’s the question that too many Canadians skip: What happens if you end up in a hospital instead of on a beach?

While nearly half of Canadians rank unexpected travel expenses among their top vacation worries, 23 per cent still say they’d travel abroad without travel health insurance to save money. Among Gen Z travellers (ages 18–28), that number nearly doubles to 47 per cent, according to the Travel Health Insurance Association of Canada.

Travel health insurance (also called travel medical insurance) is your passport to peace of mind. It’s the safety net that covers emergencies without draining your savings, whether it’s a sprained ankle, food poisoning, or an airlift from a remote island. This article explains what international travel health insurance covers, what’s excluded, common mistakes, and how to choose the right plan, so you can relax on your dream vacation.

Key takeaways

  • International travel health insurance offers essential protection for travellers. Provincial health plans offer minimal coverage outside Canada, and foreign medical bills can reach tens of thousands of dollars, often requiring payment upfront.
  • Comprehensive medical coverage goes beyond hospital bills. Coverage can include emergency dental care, medical evacuation, and 24/7 assistance.
  • Check what travel coverage you may already have. Employer health coverage or credit card coverage may be limited by trip length, age, activities, or coverage amount, so you may need to buy extra protection.
  • Understand any exclusions and requirements. Knowing what’s covered and not covered by your travel health insurance policy can prevent denied claims and costly surprises.
  • Avoid common mistakes. Complete your medical questionnaire, buy before departure, report any health changes, contact your insurer before getting care unless it’s an emergency, and follow the claims process closely.

What is international travel health insurance?

International travel health insurance (also called travel medical insurance) covers emergency health care expenses when you’re travelling outside of Canada. Like other types of insurance — home, life, or car — it’s designed to protect you if something goes sideways.

International travel health insurance can help pay for hospital stays, doctor visits, diagnostic tests, prescriptions, and even medical evacuation. Most plans offer millions in coverage for good reason: foreign hospital stays, or emergency surgery could come with a five- or six-figure price tag, often requiring payment upfront. Without this critical coverage, your dream vacation could quickly become a financial nightmare.

The bottom line: Travel health insurance may cost a little. But being uninsured could cost you everything.

What does international travel medical insurance typically cover?

Coverage varies, but comprehensive plans typically include:

  • Hospital stays
  • Doctor or clinic visits
  • Emergency medical treatment
  • Diagnostic tests
  • Prescription medications
  • Emergency dental care
  • Medical evacuation (e.g., air ambulance to Canada) or repatriation

High-risk activities (scuba, skydiving, etc.) are often excluded unless you buy specialized insurance.  Most insurers cover stable pre-existing medical conditions and, in some cases, you may need to complete a medical questionnaire. This is why disclosing medical information accurately is crucial when purchasing travel medical insurance. And remember, international travel medical insurance is for emergencies only, not for routine checkups or ongoing care.

How does international travel medical insurance work?

No one plans to get sick or injured while travelling, but if it happens, here’s how the process typically works:

  • You get sick or injured: Food poisoning, a fall, or worse, you need medical attention ASAP.
  • You contact your insurer: Depending on the terms and conditions of your policy, you may have to call before seeking treatment so the insurer can direct you to approved care and confirm what’s covered.
  • You receive treatment: Payment is made either through direct billing or by paying upfront. Either way, keep all medical receipts.  
  • You file a claim: Submit your claim form and receipts for reimbursement up to your coverage limit.

Why is international travel health insurance important?

If you plan to travel outside Canada — even for a quick trip to the U.S. — you should buy travel health insurance before you leave. It’s strongly recommended by the Government of Canada, as all it takes is one unexpected injury or illness to rack up a big bill.

Here’s why international travel insurance is an important item to pack:

Provincial and territorial health plans cover very little outside Canada: Depending on where you live, your government health insurance plan may pay a small amount, or nothing at all. Government health insurance plans also don’t pay upfront for health care outside the country and may exclude essentials like ambulance services, evacuations, or private hospital fees.

Learn more about what your provincial health care plan covers.

Medical care abroad can be expensive: In the United States, fixing a broken leg can cost up to US$7,500 while a three-day hospital stays averages around US$30,000. If you need to be evacuated by air? Expect to pay US$25,000 or more.

24/7 global support: Most providers, like RBC Insurance, offer 24/7 emergency assistance. They can help find trusted medical care, communicate with health professionals, and coordinate billing and treatment, wherever you are in the world.

Family coverage options: Many plans protect your entire travel group, giving you peace of mind if you’re travelling with children or older relatives.

Some destinations require travel insurance: Certain countries may require proof of travel medical insurance. Without it, you may be denied entry.

Customizable: You can choose a single-trip plan for a specific vacation, or a multi-trip annual plan if you frequently cross borders throughout the year.

Employer coverage or credit card coverage may have limited protection: Short trip limits, age restrictions, or low dollar caps are common.

Peace of mind: You’re supposed to be sipping a piña colada, not stressing about “what-ifs.” International travel medical insurance equips you to handle whatever life throws your way.

Key features of travel health insurance

A comprehensive travel health insurance plan does more than cover doctor’s visits — it’s a robust support system. Here are the essentials to look for:

Emergency medical coverage

From sudden illnesses to slip-and-fall accidents, international travel health insurance covers the costs of hospital stays, doctor visits, diagnostic tests, emergency treatment, and prescription medications.

Emergency dental care

Crack a tooth on a coconut candy in the Caribbean? Many plans include emergency dental treatment for sudden pain or injury. Coverage is usually capped, so check the limit before biting into anything too crunchy.

Emergency transportation

If local hospitals can’t provide the care you need, your insurance should cover transport to the nearest facility with appropriate medical services or repatriate you back to Canada if necessary. For example, RBC Insurance’s emergency transportation benefit can cover the cost of one-way economy airfare, a stretcher, a qualified medical attendant, or even an air ambulance, depending on the situation.

Pre-existing medical conditions coverage

Some insurers, like RBC Insurance, offer coverage for stable pre-existing conditions, which is critical for older adults or anyone managing chronic health issues. For complete coverage details, limitations, and exclusions, refer to your policy document.

24/7 emergency assistance

Whether you need a referral to a local clinic, translation support, or help navigating the health care system, your insurer’s emergency team should be there, day or night.

Repatriation in case of death

If you pass away while abroad, many policies cover the costs of preparing and returning your remains to Canada, including transportation and documentation fees.

How to choose the right international travel health insurance

Picking a plan isn’t quite as straightforward as booking a hotel, which is why it’s important to consider the following factors before you buy:

1. Understand your eligibility

Before anything else, make sure you qualify for coverage. Most international travel health insurance plans have basic requirements, such as:

  • Being a Canadian resident
  • Purchasing coverage before you leave your province
  • Valid government health insurance plan (e.g., OHIP) for the entire duration of your trip.

Some plans have age limits, but that doesn’t mean you’re out of luck. RBC Insurance offers plans for all age groups, including the TravelCare® Package for travellers aged 65 and up.

2. Assess your needs

To ensure your coverage reflects your itinerary, consider the following:

  • How long will you be away? Ensure you have coverage in place for the full duration of your trip.
  • Who are you travelling with? If you’re travelling with family or in a group, look for plans that insure everyone under the same policy.
  • Where are you going? Destinations with high health care costs, limited or lower-quality medical facilities may call for more comprehensive coverage.
  • What are you planning to do? Activities like hiking in remote areas or high-risk sports may be excluded. Check your coverage ahead of time.  
  • What’s your current health status? If you’re pregnant, managing a medical condition, or have recently received treatment or testing, pay close attention to the policy’s pre-existing medical condition clauses, stability requirements and exclusions.

3. Understand the policy

Every policy is different, so know exactly what you’re buying. Consider:

  • Are there age restrictions?
  • Are you required to answer medical questions?
  • Are stable pre-existing medical conditions covered, and under what terms?
  • What are the coverage limits and exclusions?
  • What is the deductible (if any)?
  • Will you have to pay out of pocket and claim later, or is direct billing available?
  • Does the policy still apply if you travel to a country under a Canadian travel advisory?
  • What happens if your medical condition changes before your departure? Do you need to update the insurer?
  • What documentation is needed to file a claim?

If it’s not crystal clear, ask the insurer. A few questions now can save confusion (and cost) later.

Check your existing coverage

Employer health coverage, credit cards, or other personal plans might help protect you, but often may have limits on trip length (e.g., 30 days), age eligibility, or activities.

What sort of things are excluded from international travel health insurance?

Exclusions can be the reason why many claims are denied. Understanding them now can help prevent costly surprises later. Here are some common ones to watch out for:

Unstable pre-existing medical conditions

Many insurers require that your condition be stable for a set period before your departure date (e.g., 90 to 180 days). A medication change, new symptom, or recent treatment could result in a medical claim not being paid.  

Tip: Ask your insurer exactly how they define terms like pre-existing medical condition, treatment, and stable. Complete a medical questionnaire, if required, so they can match you with a policy that truly covers you.

Travel medical insurance may cover unexpected pregnancy complications, but usually only up to a certain point (e.g., first 30 weeks) or as defined by your policy. Routine prenatal care, delivery, and care for newborns are typically not covered.

Tip: Confirm what’s covered before you travel and carry a copy of your prenatal records in case of emergency.

If an accident or illness occurs while you’re under the influence of alcohol, drugs, or other intoxicants, your claim may be denied.

High-risk activities

Planning to parasail, scuba dive, or do something adrenaline-fueled? Most policies don’t cover injuries or accidents from high-risk activities unless you’ve added extra coverage.

Tip: Make a list of activities you plan to do and ask your insurer if they’re covered.

Elective or non-emergency care

Most travel medical insurance plans don’t cover routine checkups, cosmetic procedures in foreign countries, or ongoing treatments for chronic conditions.

Tip: If you have a pre-existing medical condition or need regular treatment, ask for a copy of the insurance policy confirming what’s covered.

Canadian Government travel advisories

Even if a destination was safe when you booked, a new advisory before you travel could change what’s covered.

If you travel to a country under a Canadian government advisory (e.g., “Avoid non-essential travel” or “Avoid all travel”), your coverage may be reduced or denied entirely if your medical expenses are related to the travel advisory that was in place when you departed on your trip.

Tip: Check the Government of Canada’s Travel Advice and Advisories website before booking and again before departure. If you’re heading to a high-risk area, ask your insurer about any limits or exclusions that may apply to you or your travel group.

Common mistakes to avoid with international travel health insurance

Even the best medical plan won’t help if you stumble over the details of your policy. Here are some common mistakes travellers make with travel health insurance.

1. Relying solely on credit card, employer health coverage, or provincial coverage

Flash your health card, or lean on your work benefits — and you’re covered, right? Not so fast. These plans often have short trip limits, age restrictions, or gaps in coverage for things like emergency evacuation and pre-existing medical conditions. Top-up coverage is often necessary.

2. Not correctly answering the medical questionnaire 

This is the number one reason claims get denied. If you don’t complete the medical questionnaire correctly, the insurer could void your policy for misrepresentation.

3. Not reporting changes to your health before departure

If your health changes before your coverage begins and you don’t tell your insurer, you may no longer meet the original policy conditions.

4. Submitting a claim past the coverage date 

Prolonged your vacation but forgot to extend your insurance? Any medical costs you rack up after your coverage expires likely won’t be reimbursed, no matter how valid the claim.

5. Overlooking the fine print

Assuming you’re covered for everything is one of the easiest errors to make. Read your policy carefully, especially the exclusions, deductibles, and claim procedures, and ask your insurer questions.

6. Not following the claims process

Failing to follow your provider’s instructions, keeping receipts and documentation, or submitting the proper paperwork could delay or void your claim.

Before you travel

A little prep can make a big difference in a medical emergency:

  • Research your destination: Check for Canadian government travel advisories, understand local health risks, vaccination requirements, and what health care is available.

Pack your paperwork: Bring your insurance policy details, proof of coverage, and emergency contacts.

  • Know the claim process: Read your policy so you know exactly what to do and save your insurer’s 24/7 emergency number in your phone so it’s always within reach.
  • Do you have a backup payment method: Some health care providers may require upfront payment before treatment, even if you’re insured.

Protect yourself with international travel health insurance

Medical emergencies can happen anywhere — and cost far more than you might expect. Whether you catch a nasty virus or break a bone, travel medical insurance can help foot the bill and connect you with 24/7 medical assistance.

By understanding your eligibility, knowing what’s covered (and what’s not), avoiding common blunders, and prepping before you leave, you’re setting yourself up for a safe, hassle-free trip.

Don’t wait until you’re in a hospital bed in another country to wonder if you’re covered. Plan ahead, protect your health, and your wallet, so you can focus on making memories.

Get a quote from RBC Insurance today and buy your travel health insurance online before you pack your bags.

FAQs about International Travel Health Insurance

Can I extend my emergency medical coverage if I extend my trip?

Yes, you can extend emergency medical coverage depending on your policy. You must contact your insurer before your coverage expires, pay any additional premiums, and in some cases, get approval if you’ve had a medical issue while away.

Will my provincial health care cover me for international travel?

The short answer? No. Provincial plans may cover a small portion of costs abroad, but it’s rarely enough to protect you financially, and provincial health care plans don’t pay upfront. Many hospitals require immediate payment before providing treatment, and in some countries, no insurance could mean no treatment.

What insurance do I need for international travel?

Consider buying a comprehensive plan that can handle the big-ticket emergencies: hospitalization, treatment abroad, medical evacuation to Canada or the nearest facility, and repatriation in case of death.

If you have pre-existing medical conditions, understand any stability or deductible requirements, and make sure your coverage is high enough to avoid catastrophic out-of-pocket costs.

*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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You’ve booked the flights, locked in hotels, and packed enough sunscreen for a month in the sun. But here’s the question that too many Canadians skip: What happens if you end up in a hospital instead of on a beach?

While nearly half of Canadians rank unexpected travel expenses among their top vacation worries, 23 per cent still say they’d travel abroad without travel health insurance to save money. Among Gen Z travellers (ages 18–28), that number nearly doubles to 47 per cent, according to the Travel Health Insurance Association of Canada.

Travel health insurance (also called travel medical insurance) is your passport to peace of mind. It’s the safety net that covers emergencies without draining your savings, whether it’s a sprained ankle, food poisoning, or an airlift from a remote island. This article explains what international travel health insurance covers, what’s excluded, common mistakes, and how to choose the right plan, so you can relax on your dream vacation.

Key takeaways

  • International travel health insurance offers essential protection for travellers. Provincial health plans offer minimal coverage outside Canada, and foreign medical bills can reach tens of thousands of dollars, often requiring payment upfront.
  • Comprehensive medical coverage goes beyond hospital bills. Coverage can include emergency dental care, medical evacuation, and 24/7 assistance.
  • Check what travel coverage you may already have. Employer health coverage or credit card coverage may be limited by trip length, age, activities, or coverage amount, so you may need to buy extra protection.
  • Understand any exclusions and requirements. Knowing what’s covered and not covered by your travel health insurance policy can prevent denied claims and costly surprises.
  • Avoid common mistakes. Complete your medical questionnaire, buy before departure, report any health changes, contact your insurer before getting care unless it’s an emergency, and follow the claims process closely.

What is international travel health insurance?

International travel health insurance (also called travel medical insurance) covers emergency health care expenses when you’re travelling outside of Canada. Like other types of insurance — home, life, or car — it’s designed to protect you if something goes sideways.

International travel health insurance can help pay for hospital stays, doctor visits, diagnostic tests, prescriptions, and even medical evacuation. Most plans offer millions in coverage for good reason: foreign hospital stays, or emergency surgery could come with a five- or six-figure price tag, often requiring payment upfront. Without this critical coverage, your dream vacation could quickly become a financial nightmare.

The bottom line: Travel health insurance may cost a little. But being uninsured could cost you everything.

What does international travel medical insurance typically cover?

Coverage varies, but comprehensive plans typically include:

  • Hospital stays
  • Doctor or clinic visits
  • Emergency medical treatment
  • Diagnostic tests
  • Prescription medications
  • Emergency dental care
  • Medical evacuation (e.g., air ambulance to Canada) or repatriation

High-risk activities (scuba, skydiving, etc.) are often excluded unless you buy specialized insurance.  Most insurers cover stable pre-existing medical conditions and, in some cases, you may need to complete a medical questionnaire. This is why disclosing medical information accurately is crucial when purchasing travel medical insurance. And remember, international travel medical insurance is for emergencies only, not for routine checkups or ongoing care.

How does international travel medical insurance work?

No one plans to get sick or injured while travelling, but if it happens, here’s how the process typically works:

  • You get sick or injured: Food poisoning, a fall, or worse, you need medical attention ASAP.
  • You contact your insurer: Depending on the terms and conditions of your policy, you may have to call before seeking treatment so the insurer can direct you to approved care and confirm what’s covered.
  • You receive treatment: Payment is made either through direct billing or by paying upfront. Either way, keep all medical receipts.  
  • You file a claim: Submit your claim form and receipts for reimbursement up to your coverage limit.

Why is international travel health insurance important?

If you plan to travel outside Canada — even for a quick trip to the U.S. — you should buy travel health insurance before you leave. It’s strongly recommended by the Government of Canada, as all it takes is one unexpected injury or illness to rack up a big bill.

Here’s why international travel insurance is an important item to pack:

Provincial and territorial health plans cover very little outside Canada: Depending on where you live, your government health insurance plan may pay a small amount, or nothing at all. Government health insurance plans also don’t pay upfront for health care outside the country and may exclude essentials like ambulance services, evacuations, or private hospital fees.

Learn more about what your provincial health care plan covers.

Medical care abroad can be expensive: In the United States, fixing a broken leg can cost up to US$7,500 while a three-day hospital stays averages around US$30,000. If you need to be evacuated by air? Expect to pay US$25,000 or more.

24/7 global support: Most providers, like RBC Insurance, offer 24/7 emergency assistance. They can help find trusted medical care, communicate with health professionals, and coordinate billing and treatment, wherever you are in the world.

Family coverage options: Many plans protect your entire travel group, giving you peace of mind if you’re travelling with children or older relatives.

Some destinations require travel insurance: Certain countries may require proof of travel medical insurance. Without it, you may be denied entry.

Customizable: You can choose a single-trip plan for a specific vacation, or a multi-trip annual plan if you frequently cross borders throughout the year.

Employer coverage or credit card coverage may have limited protection: Short trip limits, age restrictions, or low dollar caps are common.

Peace of mind: You’re supposed to be sipping a piña colada, not stressing about “what-ifs.” International travel medical insurance equips you to handle whatever life throws your way.

Key features of travel health insurance

A comprehensive travel health insurance plan does more than cover doctor’s visits — it’s a robust support system. Here are the essentials to look for:

Emergency medical coverage

From sudden illnesses to slip-and-fall accidents, international travel health insurance covers the costs of hospital stays, doctor visits, diagnostic tests, emergency treatment, and prescription medications.

Emergency dental care

Crack a tooth on a coconut candy in the Caribbean? Many plans include emergency dental treatment for sudden pain or injury. Coverage is usually capped, so check the limit before biting into anything too crunchy.

Emergency transportation

If local hospitals can’t provide the care you need, your insurance should cover transport to the nearest facility with appropriate medical services or repatriate you back to Canada if necessary. For example, RBC Insurance’s emergency transportation benefit can cover the cost of one-way economy airfare, a stretcher, a qualified medical attendant, or even an air ambulance, depending on the situation.

Pre-existing medical conditions coverage

Some insurers, like RBC Insurance, offer coverage for stable pre-existing conditions, which is critical for older adults or anyone managing chronic health issues. For complete coverage details, limitations, and exclusions, refer to your policy document.

24/7 emergency assistance

Whether you need a referral to a local clinic, translation support, or help navigating the health care system, your insurer’s emergency team should be there, day or night.

Repatriation in case of death

If you pass away while abroad, many policies cover the costs of preparing and returning your remains to Canada, including transportation and documentation fees.

How to choose the right international travel health insurance

Picking a plan isn’t quite as straightforward as booking a hotel, which is why it’s important to consider the following factors before you buy:

1. Understand your eligibility

Before anything else, make sure you qualify for coverage. Most international travel health insurance plans have basic requirements, such as:

  • Being a Canadian resident
  • Purchasing coverage before you leave your province
  • Valid government health insurance plan (e.g., OHIP) for the entire duration of your trip.

Some plans have age limits, but that doesn’t mean you’re out of luck. RBC Insurance offers plans for all age groups, including the TravelCare® Package for travellers aged 65 and up.

2. Assess your needs

To ensure your coverage reflects your itinerary, consider the following:

  • How long will you be away? Ensure you have coverage in place for the full duration of your trip.
  • Who are you travelling with? If you’re travelling with family or in a group, look for plans that insure everyone under the same policy.
  • Where are you going? Destinations with high health care costs, limited or lower-quality medical facilities may call for more comprehensive coverage.
  • What are you planning to do? Activities like hiking in remote areas or high-risk sports may be excluded. Check your coverage ahead of time.  
  • What’s your current health status? If you’re pregnant, managing a medical condition, or have recently received treatment or testing, pay close attention to the policy’s pre-existing medical condition clauses, stability requirements and exclusions.

3. Understand the policy

Every policy is different, so know exactly what you’re buying. Consider:

  • Are there age restrictions?
  • Are you required to answer medical questions?
  • Are stable pre-existing medical conditions covered, and under what terms?
  • What are the coverage limits and exclusions?
  • What is the deductible (if any)?
  • Will you have to pay out of pocket and claim later, or is direct billing available?
  • Does the policy still apply if you travel to a country under a Canadian travel advisory?
  • What happens if your medical condition changes before your departure? Do you need to update the insurer?
  • What documentation is needed to file a claim?

If it’s not crystal clear, ask the insurer. A few questions now can save confusion (and cost) later.

Check your existing coverage

Employer health coverage, credit cards, or other personal plans might help protect you, but often may have limits on trip length (e.g., 30 days), age eligibility, or activities.

What sort of things are excluded from international travel health insurance?

Exclusions can be the reason why many claims are denied. Understanding them now can help prevent costly surprises later. Here are some common ones to watch out for:

Unstable pre-existing medical conditions

Many insurers require that your condition be stable for a set period before your departure date (e.g., 90 to 180 days). A medication change, new symptom, or recent treatment could result in a medical claim not being paid.  

Tip: Ask your insurer exactly how they define terms like pre-existing medical condition, treatment, and stable. Complete a medical questionnaire, if required, so they can match you with a policy that truly covers you.

Travel medical insurance may cover unexpected pregnancy complications, but usually only up to a certain point (e.g., first 30 weeks) or as defined by your policy. Routine prenatal care, delivery, and care for newborns are typically not covered.

Tip: Confirm what’s covered before you travel and carry a copy of your prenatal records in case of emergency.

If an accident or illness occurs while you’re under the influence of alcohol, drugs, or other intoxicants, your claim may be denied.

High-risk activities

Planning to parasail, scuba dive, or do something adrenaline-fueled? Most policies don’t cover injuries or accidents from high-risk activities unless you’ve added extra coverage.

Tip: Make a list of activities you plan to do and ask your insurer if they’re covered.

Elective or non-emergency care

Most travel medical insurance plans don’t cover routine checkups, cosmetic procedures in foreign countries, or ongoing treatments for chronic conditions.

Tip: If you have a pre-existing medical condition or need regular treatment, ask for a copy of the insurance policy confirming what’s covered.

Canadian Government travel advisories

Even if a destination was safe when you booked, a new advisory before you travel could change what’s covered.

If you travel to a country under a Canadian government advisory (e.g., “Avoid non-essential travel” or “Avoid all travel”), your coverage may be reduced or denied entirely if your medical expenses are related to the travel advisory that was in place when you departed on your trip.

Tip: Check the Government of Canada’s Travel Advice and Advisories website before booking and again before departure. If you’re heading to a high-risk area, ask your insurer about any limits or exclusions that may apply to you or your travel group.

Common mistakes to avoid with international travel health insurance

Even the best medical plan won’t help if you stumble over the details of your policy. Here are some common mistakes travellers make with travel health insurance.

1. Relying solely on credit card, employer health coverage, or provincial coverage

Flash your health card, or lean on your work benefits — and you’re covered, right? Not so fast. These plans often have short trip limits, age restrictions, or gaps in coverage for things like emergency evacuation and pre-existing medical conditions. Top-up coverage is often necessary.

2. Not correctly answering the medical questionnaire 

This is the number one reason claims get denied. If you don’t complete the medical questionnaire correctly, the insurer could void your policy for misrepresentation.

3. Not reporting changes to your health before departure

If your health changes before your coverage begins and you don’t tell your insurer, you may no longer meet the original policy conditions.

4. Submitting a claim past the coverage date 

Prolonged your vacation but forgot to extend your insurance? Any medical costs you rack up after your coverage expires likely won’t be reimbursed, no matter how valid the claim.

5. Overlooking the fine print

Assuming you’re covered for everything is one of the easiest errors to make. Read your policy carefully, especially the exclusions, deductibles, and claim procedures, and ask your insurer questions.

6. Not following the claims process

Failing to follow your provider’s instructions, keeping receipts and documentation, or submitting the proper paperwork could delay or void your claim.

Before you travel

A little prep can make a big difference in a medical emergency:

Pack your paperwork: Bring your insurance policy details, proof of coverage, and emergency contacts.

  • Know the claim process: Read your policy so you know exactly what to do and save your insurer’s 24/7 emergency number in your phone so it’s always within reach.
  • Do you have a backup payment method: Some health care providers may require upfront payment before treatment, even if you’re insured.

Protect yourself with international travel health insurance

Medical emergencies can happen anywhere — and cost far more than you might expect. Whether you catch a nasty virus or break a bone, travel medical insurance can help foot the bill and connect you with 24/7 medical assistance.

By understanding your eligibility, knowing what’s covered (and what’s not), avoiding common blunders, and prepping before you leave, you’re setting yourself up for a safe, hassle-free trip.

Don’t wait until you’re in a hospital bed in another country to wonder if you’re covered. Plan ahead, protect your health, and your wallet, so you can focus on making memories.

Get a quote from RBC Insurance today and buy your travel health insurance online before you pack your bags.

FAQs about International Travel Health Insurance

Can I extend my emergency medical coverage if I extend my trip?

Yes, you can extend emergency medical coverage depending on your policy. You must contact your insurer before your coverage expires, pay any additional premiums, and in some cases, get approval if you’ve had a medical issue while away.

Will my provincial health care cover me for international travel?

The short answer? No. Provincial plans may cover a small portion of costs abroad, but it’s rarely enough to protect you financially, and provincial health care plans don’t pay upfront. Many hospitals require immediate payment before providing treatment, and in some countries, no insurance could mean no treatment.

What insurance do I need for international travel?

Consider buying a comprehensive plan that can handle the big-ticket emergencies: hospitalization, treatment abroad, medical evacuation to Canada or the nearest facility, and repatriation in case of death.

If you have pre-existing medical conditions, understand any stability or deductible requirements, and make sure your coverage is high enough to avoid catastrophic out-of-pocket costs.

RBC Travel Insurance

If you need help during your trip for a medical or other travel emergency, help is available 24/7.

Learn More

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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TORONTO, May 20, 2025 — As the workforce continues to diversify and evolve, tailored benefit plans are key to healthier, more resilient teams. Yet new survey data from RBC Insurance highlights how coverage gaps—driven by accessibility, affordability, and awareness—are impacting employee well-being, particularly for women, individuals managing chronic conditions, and younger generations entering the workforce.

  • Three-quarters (75%) of women say they want or need benefits that specifically support women’s health.
  • Those managing chronic physical (31%), developmental (31%), or mental health-related disabilities (28%) report that coverage amounts are often insufficient to cover their needs, resulting in out-of-pocket costs higher than they can justify.
  • One in five (20%) working Canadians aged 18-34 are unsure of the employee benefits coverage available to them.

“These findings are a call to action for employers and benefits providers alike, as there’s a real opportunity to close the gap between what employees need and what they receive,” says Tony Bruin, Head of Group Benefits at RBC Insurance. “The more an employer tailors and prioritizes more inclusive and relevant benefit solutions, the more they can truly support their employees.”

At a time when costs are rising for employees and employers, companies can start optimizing their group benefits by looking closely at their specific workforce characteristics and tailoring plans to ensure equitable and inclusive coverage.

Addressing the coverage needs of women

Despite making up nearly half of the workforce in Canada, women’s needs are misaligned when it comes to employer group benefits. Seventy-five per cent of women say they want or need benefits that specifically support women’s health, including services for fertility and menopause. In addition, women are more likely than men to report:

  • Insufficient coverage amounts prevent them from accessing the care they need (31% versus 22%)
  • Difficulty securing appointments (25% versus 17%)
  • Rising costs and affordability (68% versus 49%) or mental health issues like anxiety or depression (33% versus 17%) as barriers to improving their well-being
Chronic conditions and the cost of care

More than half (54%) of employees or their spouses are living with a chronic condition, making access to care a critical component of overall well-being. However, the survey revealed that rising costs and affordability continue to be a major barrier, preventing individuals from fully utilizing their benefits or seeking the care they need.

Six in ten (58%) Canadians cite affordability as a key factor impacting their well-being, and those with chronic conditions are more likely than other groups to identify rising costs and affordability issues.

Those managing physical (31%), developmental (31%), or mental health-related disabilities (28%) report that coverage amounts are often insufficient, resulting in out-of-pocket costs higher than they can justify.

Younger workers face gaps in relevance and awareness

Many in the Gen Z and Millennial generations, aged 18-34, feel that the coverage amounts offered by group benefits are insufficient and do not adequately meet their needs. While they are the most interested in making lifestyle changes to enhance their financial health, manage stress, and achieve work-life balance, many report barriers such as affordability (59%), lack of motivation (44%), and busy schedules (40%).

In addition, there is a lack of awareness about coverage, with 20% of 18-34-year-olds unsure of their benefits, compared to just 13% of those aged 35-54 and 12% of those aged 55+. To better support a younger workforce, employers can consider enhancing the relevance and communication of their benefit offerings.

“As the workforce becomes more diverse across age, gender, and health needs, employers and group benefits providers have an opportunity to reimagine what modern support looks like,” says Bruin. “When employers focus on investing in more inclusive, tailored benefits, they can boost employee satisfaction while building healthier, more engaged teams.”

To learn more, visit rbcinsurance.com/group-benefits.

About the RBC Insurance Survey
These are some of the findings from an Ipsos poll conducted on behalf of RBC Insurance. For this survey, a sample of 1,000 working Canadians ages 18-65 were surveyed online via the Ipsos I-Say panel between January 29-31, 2025. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within ± 3.8 percentage points, 19 times out of 20, of what the results would have been had the entire population of working adults aged 18-65 in Canada been surveyed. Credibility intervals will be wider for smaller subsets of the population.

About RBC Insurance
RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, group benefits, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, Canada’s biggest bank and one of the largest in the world, based on market capitalization. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with 2,700 employees who serve nearly 5 million clients globally. For more information, please visit rbcinsurance.com.

Media contact:

Cody Medwechuk, RBC Insurance Corporate Communications

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If you were suddenly faced with a serious injury or illness, would you be able to care for and support yourself and your family? That’s the question we all need to answer when considering critical illness insurance and disability insurance.

Having the right coverage can mean a world of difference. It could be the factor that tips the balance between financial stability and all-consuming worry during an already-stressful time.

But what exactly are the differences between critical illness insurance and disability insurance? Is one better than the other, or are both necessary? This quick primer can help you understand the unique benefits of each type of policy and when one or both will best suit your needs.

Key takeaways

  • Critical illness insurance provides a one-time lump-sum benefit if you’re diagnosed with a serious health condition, such as life-threatening cancer, a heart attack, or a stroke.
  • Disability insurance helps with monthly income replacement if you can’t work for a period of time due to injury or illness.
  • Though critical illness insurance and disability insurance may overlap with coverage in some cases, they tend to provide protection for different illnesses and scenarios. They also have distinct exclusions and waiting periods.
  • Depending on your individual situation, one or both types of insurance might provide the best coverage for you and your family.

Understanding critical illness insurance

What is it?

Imagine you’re diagnosed with a serious illness, such as life-threatening cancer or experience a heart attack or a stroke. You may require specialized treatments, time off work, accommodations in your home, or help with self-care. These new needs may place a hefty financial burden on you and your family when you’re trying to recover.

While other health insurance policies may cover some of your medical expenses or help with income replacement, critical illness insurance directly pays out a one-time, tax-free lump sum. It’s designed to alleviate the financial stress associated with severe illness. And you can use the benefit however you want, such as paying for medications or treatments not covered by your other insurance, continuing to contribute to your retirement savings while you’re off work, upgrading your house or vehicle to suit your new needs, paying for childcare, or even taking a vacation to recharge. Critical illness insurance acts as a safety net and gives you flexibility during a challenging time.

Types of illnesses covered

The illnesses protected by your critical illness insurance will depend on the insurer and the plan you purchase. Typically, these conditions are commonly covered:

  • Life-threatening cancer
  • Heart attack
  • Stroke
  • Kidney failure
  • Major organ transplant
  • Coronary artery bypass surgery
  • Multiple sclerosis

More comprehensive plans may also provide coverage for conditions such as dementia, including Alzheimer’s disease, Parkinson’s disease, blindness, deafness, and even severe burns, paralysis, and loss of limbs. Before purchasing a policy, make sure you understand which illnesses are covered by the plan and any exclusions or limitations (such as waiting periods or survival periods before you’re eligible to claim your benefit).

Exclusions

Many plans will not pay out a lump sum or refund any premiums if you experience an illness, death, or other loss that results directly or indirectly from one of these situations:

  • Self-inflicted injury, attempted suicide, or suicide.
  • Intentional use of any drug (not prescribed by a doctor), intoxicant, narcotic, or poisonous substance.
  • Participation in a war or a hostile action, insurrection, or civil commotion.
  • Attempt to commit or commission a crime, whether you’re charged or not.
  • Operation of any land, water, or air conveyance that’s operated by any means other than your own muscle (think cars, motorboats, planes) while you’re under the influence of any drug, intoxicant, narcotic, or poisonous substance, including alcohol. For alcohol, the limit begins when the concentration of alcohol in 100 millilitres of blood exceeds 80 milligrams.

Speak with your insurer to confirm the details of your specific policy.

Understanding disability insurance

What is it?

If an illness or injury keeps you from working, disability insurance will typically pay out a monthly benefit to replace a portion of your lost income (often around 60 per cent to 85 per cent). Whether you experience a short-term disability, such as an injury that requires months of leave, or a long-term disability that means you can’t work for years, disability insurance acts like a consistent paycheque to help you cover your living expenses and medical bills.

Types of disabilities covered

As with critical illness insurance, the types of illnesses and disabilities covered will depend on your insurer and the plan you choose. You may receive protection in the following instances.

  • Total disability: When you’re unable to perform the essential duties of your occupation due to an illness or injury.
  • Residual disability: When your illness or disability prevents you from performing some of your essential work duties, resulting in a 20 per cent or more loss in earnings. You will eventually recover.
  • Partial disability: When you can’t perform any of the essential duties of your regular occupation and you experience a 20 per cent or more loss in earnings. You will eventually be able to go back to work.

Exclusions

Much like critical illness insurance, disability insurance will typically not cover any disability that results, whether directly or indirectly, from these situations:

  • An act or accident of war.
  • Normal pregnancy or childbirth (except complications).
  • Any injury or illness that occurs before your policy comes into effect or while your policy is not in force.

Some plans will also have these exclusions:

  • Any self-inflicted injury, whether or not it’s intentional, that occurs while you’re intoxicated.
  • Your use of any drug, unless it’s prescribed or directed by your physician.
  • Any suicide attempt or other intentionally self-inflicted harm.
  • Infections related to AIDS and HIV.
  • Any injury that occurs while you are committing or attempting to commit a crime, even if you’re not charged with that crime.
  • Subjective conditions, such as fibromyalgia and chronic fatigue syndrome.
  • Mental and nervous disorders, such as depression, anxiety, stress, and burnout.

Schedule a chat with your insurer if you’re not clear on the exclusions in your policy (or any policy you’re considering buying).

Key differences between critical illness insurance and disability insurance

Before you can decide whether to purchase critical illness insurance, disability insurance, or both, it’s important to understand how each type of coverage works and the ways each can provide you with financial stability during a health crisis. This chart can help you understand the primary differences between critical illness insurance and disability insurance.

Critical illness insuranceDisability insurance    
Triggering eventYou can make a claim if you’re diagnosed with one of the conditions or illnesses listed in your policy.
 
Your ability (or inability) to work is not a factor.		You can make a claim for benefits if you cannot complete some or all of the tasks required for your job due to injury or illness.
 
The focus is on the illness or injury hindering your ability to do your job, rather than the specific diagnosis.
Waiting periodYou will often need to live beyond the survival period (a.k.a. a set amount of time beyond your diagnosis, usually 30 days) before you are eligible for benefits.You will have to wait the elimination period (a set number of days after you receive your diagnosis) before you begin getting payments.
Nature of benefitsYou’ll receive a one-time lump sum, which, depending on your plan, can range from $10,000 to $3 million.Designed to replace a portion of your lost income while you cannot work, this benefit is often paid out each month and lasts for as long as you remain disabled or until the end of your benefit period.
Duration of benefitsIn most cases, your policy will end once you receive your one-time lump-sum payment. However, some insurance providers have riders that cover a second critical illness and payment.You will receive ongoing payments for the duration of your disability, from a few months to many years, up to the limit defined in your policy. Some plans will pay for a disability that lasts until retirement age, while others have a benefit period of two, five, or 10 years.
Use of payoutYou can use the lump-sum benefit however you want: to pay medical bills, upgrade your home, contribute to your RRSPs, try alternative treatments, or take a vacation to unwind.These benefits are designed to cover living expenses while you cannot earn your regular income. While you can use the payments however you want, the amount you receive at one time is smaller and best for maintaining financial stability during a period of low or no income.
Who can applyAnyoneEmployed and self-employed people
Age eligibilityCoverage often ends between the ages of 65 and 75 years; although, some providers offer permanent insurance.Coverage often ends between the ages of 55 and 69 years.
PremiumsYour premiums are based on the number of illnesses covered, the lump-sum payout amount you choose, your age, how long the coverage will be in place, and your overall health status.Your premiums will depend on the disability types covered, your monthly benefit amount, how long you will be eligible to receive benefits, and your occupation.
TaxabilityTax-freeIt’s tax-free income if you paid for it, and it’s taxable income if your employee paid for insurance for you.

How to best choose between critical illness insurance and disability insurance

Whether disability insurance or critical illness insurance will be right for you will depend on several factors, such as your occupation, financial situation, health risks, and more.

  • Financial needs and responsibilities: Take a look at your financial obligations, from mortgage payments to support of dependants. Critical illness insurance can help with large immediate expenses. Disability insurance is designed to provide ongoing income.
  • Health risks: Critical illnesses are common.Each year, around 247,000 Canadians will be diagnosed with cancer, and 108,000 will experience a stroke. Critical illness insurance could be an invaluable safety net if you’re affected by one of these conditions one day. If you have a job that increases your risk of injury or certain illnesses, then disability insurance may be the option for you.
  • Employment situation: Anyone is eligible for critical illness insurance; whereas, you must be employed or self-employed to purchase disability insurance. If you work for a company or organization, make sure you’re familiar with your employee benefits. For example, you may have comprehensive disability coverage, but no critical illness insurance. In that case, you might want to purchase your own critical illness policy.
  • Budget: In an ideal world, we’d all have premium disability and critical illness insurance coverage. In the real world, these plans cost money. It’s important to balance your coverage needs with the premiums that you can afford.
  • Dependants and family responsibilities: You may have a wide variety of people (children, aging parents, or family members with disabilities) and pets relying on your income. Critical illness insurance can provide flexibility with a larger payout if you’re diagnosed with a serious condition, while disability insurance can help to cover your day-to-day expenses.

Is it better to combine both types of insurance?

Even though both are types of health insurance, critical illness insurance provides different benefits than disability insurance. Critical illness insurance is designed to immediately alleviate financial strain if you’re diagnosed with a serious illness or condition. Disability insurance covers a broad range of illness and injuries that can affect your ability to work and helps with day-to-day expenses. You may want to combine both types of insurance if you’re looking for well-rounded coverage that protects you in many circumstances. Speak with an insurance advisor to help you make the decision that best suits your lifestyle. They can help you balance your current and long-term needs, consider your risks and budget, and help you choose the right policies to protect you and your family in all scenarios.

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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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TORONTO, January 14, 2025 — Amid a currently challenging economy, Canadians may be feeling some uncertainty about the future. While many are clear that they want to financially protect their families after they’re gone, they also admit they aren’t actively planning to achieve these goals, according to a recent survey by RBC Insurance.

The majority (82%) of Canadians feel it is important to ensure their family receives money quickly to avoid paying out-of-pocket for a funeral or other end-of-life expenses. As many as 76 per cent want to ensure their estate is taxed as little as possible to leave their family a larger inheritance, and 70 per cent want to pass money to their family.

However, just 15 per cent of Canadians have a plan for how their money and belongings will be transferred to loved ones after they’re gone, which only increases to 24 per cent for current retirees. Meanwhile, less than four in ten (38%) retirees have set aside money or have life insurance to pay for final expenses. Retirees are also the least likely to be knowledgeable about various types of insurance policies, overlooking the potential that could help achieve their goals.

“We often hear people say, ‘I had no idea how hard it would be’,” says Selene Soo, Director, Product Management at RBC Insurance, referring to the process of managing a loved one’s assets after they have died. “This is followed quickly by: ‘If I had known, I would have helped to prepare their finances differently.’ It’s hard to hear because we know there are ways to make it easier.”

Open conversations and working with professionals early to develop strategies based on your goals and unique situation can alleviate stress for you and your family later.

Relieve the admin burden for your loved ones.

While over half (53%) of Canadians confess they don’t want to be a burden on their families when they’re gone, many are surprised by the administrative and financial weight of managing a loved one’s estate. Talking with your family and experts in advance can help them navigate complex paperwork, such as closing off bank accounts, paying debts, filing a last income tax return and maintaining property or other assets until they can be sold.

Ensure money is available as soon as your family needs it.

If not properly planned for, end-of-life costs may leave your family paying out-of-pocket. While money may be available, it is often tied up in probate – a legal process that can take several months or more than a year, while a court decides what happens to your financial assets and debts after you’re gone and who is authorized to act on your behalf. Insurance products like life insurance and segregated funds automatically bypass probate if you name a beneficiary. This means your loved ones will receive any inheritance quickly, so they can be ready for financial surprises that may come their way. It also means you can minimize potential probate-related fees, making sure more money gets to your loved ones.

Stay in control of who receives your money.

Help your family avoid uncertainty and waiting periods by naming beneficiaries – the people who will receive the benefits of your policy or account when you die. This is especially helpful if you have complex family dynamics, own a business or if there is no written will. Identified beneficiaries receive money quickly and directly, avoiding the risk of needing to pay off debts first.

Regardless of your age or wealth, creating a plan with the help of loved ones and professionals will ensure that your finances are properly structured to achieve your legacy goals. As you consider your unique needs, talk to an advisor to simplify the experience and help your family when you’re gone. For more information, visit What Is Estate Planning? | RBC Insurance.

About the RBC Insurance Survey
These are some of the findings from an Ipsos poll conducted on behalf of RBC Insurance. For this survey, a sample of 1,250 Canadians aged 18+ was surveyed between July 26 to 29, 2024. Included within this sample is an oversample of 250 Canadians aged 45-75 years old with a reported household income of $150k+. The precision of online polls is measured using credibility interval. In this case, the results are accurate to within +/- 3.4 percentage points, 19 times out of 20, of what the results would have been had the entire population of Canadians 18+ been surveyed. Credibility intervals will be wider for smaller subsets of the population.

About RBC Insurance
RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, group benefits, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, Canada’s biggest bank and one of the largest in the world, based on market capitalization. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with 2,600 employees who serve 4.8 million clients globally.

Media contact:

Jana Lepp, RBC Insurance Corporate Communications

*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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