Critical Illness And Cover Life Insurance

Critical illness insurance is a type of cover you can take out in order to ensure that your dependents are paid a lump sum of money in the event that you are diagnosed with a life-threatening illness which is included within your policy.

The majority of providers will attach at least 40 diseases to their critical illness policies, though the illnesses included in a certain cover will range across the market. Critical illness cover can be a hugely useful way of ensuring that your family receives the immediate financial support it would need to meet its payments for living essentials, should you suddenly acquire an ailment and be unable to earn your monthly income.

However, critical illness insurance can often be an expensive acquisition, both on its own and in addition to your life insurance premiums, and as such it is important that you take into consideration a number of factors before making your final decision about whether to start paying for it.

For advice on how to select the best policy for your individual situation, fill out our quick and easy quote form and we will introduce you to advisor who can provide you with a comparison of the best policies available to you.

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How it works

What is critical illness cover

and how does it work?

Critical illness insurance is a form of cover that you can take out to ensure that you are paid a tax-free lump sum of money, in the event that you are diagnosed with an illness specified within your policy. The types of ailments usually included within critical illness cover policies are life-threatening, long-term conditions such as Parkinson’s disease, strokes or cancer, though the illnesses covered will vary between different providers.

Critical illness cover is typically taken out in order to ensure that a policyholder’s dependents acquire a sufficient amount of money to deal with their immediate household expenses, in the event that the main breadwinner is rendered incapable of working for regular income.  The money paid out can be used to cover the policyholder’s medical costs or to make their mortgage payments until they recover, though in truth the cash can be utilised for any purpose they desire.

When purchasing critical illness insurance, you can either decide to pay your premiums at a fixed or reviewable rate. If you choose to pay your premiums at the same rate throughout your insurance term, then the initial costs of your cover will usually be more expensive than if you decided to use a reviewable premium, though you will be able to know exactly how much you owe each month and plan your finances ahead accordingly.

Alternatively, you could decide to use a reviewable rate on your premiums, which will usually mean you pay a lower initial amount for your cover but will be subjected to steady rises in this amount as your term progresses. This might make it harder to prepare financially for your premium payments and may be the more expensive option in the long-term.

You should keep in mind that a number of ailments and diseases are often excluded from critical illness policies, and it might be worth considering an income protection policy if you want to obtain insurance for mental-related illnesses. Whilst this form of cover is more expensive than critical illness insurance, it will most likely include a wider range of diseases and conditions, which might be more desirable for you.

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The Best Providers

Your advisor will compare quotes from the leading life insurance providers in order to get you the lowest quote possible, while still ensuring that your life policy meets all of your requirements.

Advantages of critical illness cover

  • The best providers of critical illness insurance will include over 50 different diseases within your policy, including heart-related diseases, most types of cancer and kidney failure.
  • Your family will receive a lump sum of cash in the event that you are diagnosed with a life threatening illness, which will give them the chance to financially plan ahead if you were to pass away.
  • Flexible option where you can decide the level of cover you require.
  • If your family is paid out a lump sum of cash from your cover, they will no longer be required to pay any more on premiums, and can utilise the money to pay for the immediate financial demands that you are unable to meet due to your ailment.

Disadvantages of critical illness cover

  • Is often more expensive the older you get, which could make it financially unattainable for certain individuals.
  • Is substantially more expensive for people with dangerous hobbies such as smokers or climbers etc.
  • Different providers have ranging policies about which illnesses can be included within your cover, and you might find yourself paying for insurance that does not pay out when you get sick.

Key points to consider before obtaining critical illness cover

Prior to pursuing the acquisition of critical illness insurance, you should consider the following:

do i require critical illness cover?
In order to ascertain whether you actually require critical illness insurance, you should look at:

Whether you currently possess a sufficient amount of savings to cover your family in the event that you are diagnosed with a life-threatening disease. If you do, then there is probably no need to spend your money on critical illness cover.

Your company policy towards sick employees; evaluate your working arrangement and identify whether there are any financial provisions that your workplace will pay out to you if you were to suddenly fall ill.

Whether you currently have critical illness cover attached to another life insurance policy that you have taken out. Alternatively, re-evaluate your mortgage arrangement to see whether you have some form of critical illness cover attached in the event that you became sick and could not make your monthly mortgage repayments on time.

Do you have enough money to pay for critical illness insurance?

Critical illness insurance premiums can often become expensive, and you will have to decide whether it is financially worthwhile making regular payments to have a cover that you might never have to use. Before signing up to any deal, you should determine whether you can actually afford to make your payments over a long-term period. If you do not have a steady income, or are currently unemployed, then it is advised that you wait until you are in a better position financially before taking out critical illness cover.

Which illnesses are covered by critical illness insurance

Not all conditions are covered by critical illness insurance policies, and it is worth noting that you will usually have to be completely debilitated or drastically unwell before being able to make a successful claim over a sickness contained in your policy.

You might also be excluded from being covered for sicknesses which your family has a history of suffering from, which might narrow the range of illnesses contained in your policy even further.

You should make sure that you are fully aware of all the illnesses included in your insurance policy from the initial stage of shopping around, so that you do not begin paying for a deal that does not contain the ailments you desire to be insured for.

Key points to consider when taking out critical illness insurance

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Identify the amount you will be paid out if you are diagnosed with a condition included in your policy and manage to make a successful claim. Remember, you will only receive a single lump sum payment from your policy, so obtaining an appropriate deal which covers the costs of all the expenses you pay in a year is imperative to attaining value for your money.

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Evaluate the critical cover policy documents of different providers in order to clearly identify which illnesses you will be covered for. It might be important to you to be insured for specific conditions, and since there is no universality across the industry about which ailments are definitively included in critical insurance cover, you will need to look around in order to find the best suited deal for you.

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Determine how ill or debilitated you will need to be in order to make a claim on your policy. There are a number of providers who will reject the claims of policyholder’s who are suffering from the early stages of cancer or conditions, and might specify in their policy documents that you have to be severely ill before you can be considered for a payout.

What information will i need to provide my insurer with?

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You will have to provide your insurer with a comprehensive set of information about your personal and family medical history. It is essential that the details you pass on to them are truthful and accurate, because you could be prevented from receiving a payout if it arises that you omitted key information whilst applying for your cover.

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If you’re currently suffering from a medical condition, or have repeatedly suffered from the same ailment throughout your life, then it is still possible for you to acquire critical illness insurance. You will have to find an insurer who provides policies to individuals with pre-existing conditions, and the likelihood is that the premiums will be more expensive.

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You will also have to disclose information about your hobbies, employment and lifestyle, including whether you partake in any risky activities and whether you are a smoker or not. Usually, if you are someone who works or actively participates in dangerous activities, the amount you will have to pay on your premiums will be more.

How much will my critical illness cover cost?

The amount you will be asked to pay for your critical illness insurance will be based on the following:

  • Your gender. Typically, males will pay marginally more for their critical insurance cover.
  • Your occupation. If you do a job that is perceived to be high-risk, then you insurance premiums will be more expensive.
  • Your age. Essentially, the older you are, the more expensive your cover will be because you will be more likely to fall ill.
  • Your lifestyle and leisure activities. If you are a smoker, or have aspects of your lifestyle that put your health at risk, then you will have to pay more for your insurance. Similarly, if you frequently partake in dangerous activities, such as sky-diving or climbing, then your premiums will also be higher than if you didn’t.

Can i cancel my critical insurance policy

Typically, you will be able to terminate your policy and receive a full refund within 30 days of obtaining it, providing that you do not make a claim during this period.

You can still terminate your policy after this 30 day period, though there is no guarantee that you will receive a refund. Your provider’s willingness to do this will be based on their company policy and the terms of your arrangement agreed at the initial point of acquisition.