Why Critical Illness Insurance Claims Get Denied, and How to Reduce Your Risk

Most valid critical illness claims are paid, but denials do happen, usually for a handful of specific and avoidable reasons. Here's what tends to cause them, and how to put yourself in the strongest position when you apply and when you claim.

Most Claims Are Paid, But Not All

The overwhelming majority of valid critical illness claims in Canada are paid out, with industry-wide approval rates commonly cited in the 90 to 95 percent range. Denials are the exception, not the rule, and when they do happen, it's almost always for one of a small number of specific, and often avoidable, reasons.

The Most Common Reasons Claims Are Denied

• The diagnosed condition doesn't meet the exact definition in the contract, for example a cancer diagnosis that doesn't meet the policy's specific staging or severity threshold, even though it's a real and serious diagnosis
• The insured did not survive the required survival period following diagnosis, so the contractual condition for payment wasn't met
• Non-disclosure at application, meaning a pre-existing condition, symptom, or relevant health history wasn't disclosed when the policy was applied for, which can void coverage for that condition or the policy as a whole
• The specific condition simply isn't on the policy's list of covered conditions, even if it's a serious diagnosis

These aren't arbitrary technicalities. Critical illness contracts are written with precise medical definitions specifically so that claims can be assessed consistently and fairly, and disclosure requirements exist so that pricing reflects the actual risk being insured. The frustration for policyholders usually comes from not knowing these specifics existed until a claim is already underway.

Reducing Your Risk of a Denied Claim

• Disclose your full health history accurately and completely at application, even details that seem minor or unrelated
• Ask your advisor to walk through the exact definitions of the conditions most relevant to you before you buy, not after you need to claim
• Keep a copy of your policy wording and review it periodically, especially if your insurer updates definitions on renewal or conversion
• Work with your advisor and medical team to submit complete documentation promptly when you do need to file a claim
• If a claim is denied, ask specifically which definition or requirement wasn't met, and discuss your options with your advisor

None of this guarantees a claim will be approved, since ultimately it depends on meeting the specific terms of your contract. But full disclosure at application and a clear understanding of your policy's definitions before you ever need to use it are the two things most within your control.