What is critical illness cover?
A life insurance policy which has critical illness included works just like normal cover in that it will pay out in the event of your death. However, in addition, the critical illness element will pay out a set amount in the event that you are diagnosed with one of the illnesses covered by the policy.
This cash lump sum can be used to replace your income, help with some of the expenses associated with treatment, or fund adaptations to your home which will help you live a full life going forwards.
Don’t confuse critical illness and terminal illness, the latter pays out if you are diagnosed with one of the stated illnesses and are predicted to die within 12 months.
Why take out life insurance with critical illness?
A standard life insurance policy will pay a set amount to your named beneficiaries in the event of your death. This money can be used to pay for your funeral, to pay off debt such as a mortgage or to simply cushion the blow of their loss.
However, sometimes life can present us with situations that are financially harmful for our loved ones but which don’t always result in death.
- If you can no longer work because of a serious illness, how would your family manage to meet the regular household expenses?
- Would they be able to afford the mortgage payments, repayments on loans or credit cards and the regular expenses like shopping and tax?
- If you needed adaptations to be made to the home to accommodate your new lifestyle, would they be able to afford this comfortably?
If the answer is no, then a life insurance policy with critical illness cover could be the answer you’ve been looking for.
Levels and cover
There are a huge range of options available for you to choose from, and our friendly consultants can help you navigate the offers available to find the best policy for your needs.
You can pick and choose the policy that offers the financial level of cover you need, as well as covering the illnesses you wish to be protected against, so that you can be sure your family are adequately protected.
As a general rule, the more you wish your life to be insured for, the higher your premium will be. Your premium will be set based upon your current health, age and lifestyle, so the younger and fitter you are right now, the less you will pay for your insurance.
As you age, insurers will ask you to pay higher premiums for the same level of cover, so it’s worth taking out your policy earlier in your life to secure your payments at an affordable level.
Critical illness – which illnesses are covered?
The list of illnesses which are considered to be ‘critical’ vary from one insurer to another. However, most critical illness policies will cover the most common problems such as heart attack, cancer or stroke, and there will often be a list of 40 or more other illnesses which are eligible for a claim.
Generally, any illness which leaves you with long lasting, major changes to your lifestyle will be covered by a critical illness policy. Some insurers even pay out a proportion of the sum insured for some additional, less severe illnesses.
If you smoke then you are at greater risk to a wide range of serious illnesses, including a stroke, heart attack, emphysema and heart disease. All of which are highly likely to impact on your ability to work.
Things to consider with critical illness:
- This is not a savings policy
- If you cancel your policy, there is no cash-in value
- Cover will end if you don’t make monthly payments
- Terminal illness and critical illness are not the same thing
- If you take out critical illness cover check which conditions are covered within the policy
- Generally it’s more affordable to combine your life insurance policy with a critical illness element, as opposed to taking out two separate policies
- However, as a result, if you combine the two there will only ever be one pay out.
Talk to our Reassured consultants on 0808 168 2025 about securing a comprehensive life insurance policy, with critical illness cover included. Alternatively Start Your Quote online today.