How does it work?

Critical Illness Cover insurance pays a cash lump sum if you are diagnosed with one of the defined illnesses or disabilities covered by the plan.

Many of us know of someone who has suffered a serious illness, injury or died young. Often our clients inquire about financial protection against such life changing events because they have seen the benefit of having cover in place or the effects of not insuring against such things.

Do I need Critical Illness Cover?

If you were unable to pay your mortgage, household bills and other committed outgoings as a result of suffering a serious illness or injury, you should consider Critical Illness Cover and Income Protection.

Hints and tips

What to consider when taking out Term Life Assurance

The good news

With the advances in medical science, early detection of many illnesses coupled with improved treatments and preventative procedures have significantly improved survival rates over the last few years. As a result, people are living longer and often returning to some sort of normality from a critical illness within a relatively short period of time.

The bad news

Statistics don’t lie and sadly the likelihood of being diagnosed with a critical illness is much higher than death, in any given term.

The solution

Critical illness cover is designed to provide for you financially should such a serious event, as defined by the policy, affect you within your chosen term.

Critical Illness Cover can be arranged to pay for various things so that you can concentrate on recovery. Some examples of what the cash lump sum can be used for include:

  • Clearing all or part of a mortgage
  • Funding private treatment to beat NHS waiting lists
  • Obtaining medication not available through your local PCT
  • Providing access to overseas specialists clinics
  • Paying for alterations to your home and/or vehicle

It is important to understand that Critical Illness Cover policies vary from insurer to insurer. Unfortunately, many of these variations are not particularly clear when comparing at first glance. To assist you, we have produced a guide to help you understand these variations so that you can protect the areas that are most important to you whilst still finding great value cover.

Don’t need life cover with it? Check the price anyway

It may seem to fly in the face of logic but in some cases, death or earlier Critical Illness Cover, that is to say a Life Assurance policy with critical illness ‘attached’ is cheaper than ‘stand alone’ Critical Illness Cover. In other cases, it’s the same price with or without life cover.

“It’ll never happen to me”

We all think - or at least hope – we won’t become part of the statistics. When considering if Critical Illness Cover is right for you, don’t just think about the chances of a claimable event but also the effect of not being protected. Consider some common objections.

“Critical Illness Cover is just too expensive”

If you’ve already compared quotes for Life Assurance only and Critical Illness Cover you will have noticed that there is a significant difference in premium. It’s not unusual for critical illness cover to be four or five time the cost of ‘stand alone’ life cover. The reason is quite simply because the likelihood of you claiming is so much higher. This may affect your decision about taking it out at all. Before you dismiss it altogether though, consider the cost of a lower amount of benefit sum assured.

Separate it from your mortgage? Many, if not most people who have Critical Illness Cover in place have it arranged to clear their mortgage balance on claim. It’s not uncommon for this to be the only form of term assurance protection they hold. Although it’s not pleasant to imagine ourselves in a situation where we are claiming on such a policy, ask yourself, if this were the case, what would I likely do with the money? It may be that with no specific prognosis you could be unsure how long the illness will affect you for.

“I’m fit and healthy, why would I need critical illness cover?”

If you look after yourself, or are simply blessed with good health without a regime of healthy eating and exercise, you may reason that you don’t need to protect against such events as diagnosis of a serious illness. Bear in mind though that by its nature, all insurance is designed to protect against future unknown events. It’s obviously true that someone with a fit and healthy lifestyle who is not at risk of hereditary diseases is less likely to suffer certain lung, throat and liver cancers or cardio-vascular disorders than a chain-smoking, morbidly obese diabetic with hypertension, high cholesterol and a family history of cancer, multiple sclerosis and heart disease.

That’s the point. Take out cover when you are a low insurable risk - not when protecting your life would be difficult, expensive, restricted or completely unavailable.

“I’m too young to think about Critical Illness Cover”

For similar reasons to those highlighted in the above section, Critical Illness Cover is cheaper, the younger you are when you take it out. A recent analysis of critical illness claims by Bright Grey shows that in the second half of 2010, 44% of claims were made by people aged under 40. The youngest age for a cancer claim was 28 and youngest heart attack claimant was 35.

We’re all natural optimists, but even just a small amount of cover would reduce the risk of leaving it to chance.

For more information about critical illness cover including how we can help to guide you through the options and find the best value for money, why not have a chat with one of our friendly experts?

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