Scenario 82: What is the purpose of Critical Illness Insurance?

Question: Scenario 82: What is the purpose of Critical Illness Insurance?

Answer options:

• To replace lost income due to inability to work from an accident or illness. ✅ To provide a lump-sum payment upon diagnosis of a serious, life-altering illness.
• To cover medical expenses not paid by provincial health plans.
• To pay out a death benefit to beneficiaries.

Correct answer: To provide a lump-sum payment upon diagnosis of a serious, life-altering illness.

Explanation: Critical illness insurance provides a tax-free, lump-sum payment if the insured is diagnosed with one of the covered critical illnesses, helping to cover costs or replace income during recovery. The correct answer is "To provide a lump-sum payment upon diagnosis of a serious, life-altering illness.". This capacity-fill scenario 82 reinforces the same competency for the cfp bank and follows the certified explanation standard.