Critical Illness Cover pays out if you are diagnosed with an illness or need to undergo an operation specified within the critical illness cover policy.
It is designed to help you adapt if your life is changed by an illness.
The illnesses covered by each insurer’s critical illness cover policy all provide ‘core cover’, which are a list of the same kind of conditions. However, the policy conditions may differ between insurers, so it is important to read the full details of the plan you are considering.
The following conditions are typical:
- Cancer – excluding less advanced cases;
- Heart Attack – of specified severity;
- Stroke – resulting in permanent symptoms.
- Blindness – permanent and irreversible;
- Coma – resulting in permanent symptoms;
- Deafness – permanent and irreversible;
- Kidney Failure – requiring dialysis;
Insurers may also exclude some conditions if you already have them, or they are in your own or your family history, or are likely to get them because of your health or lifestyle. The premiums are often reviewable, meaning they may change during the term of the policy; although, some providers offer fixed premiums that are guaranteed not to change.
Critical Illness cover is not designed as a replacement for your income.
Critical illness policies are available on the same basis as level and decreasing term life policies, and can be included within a life assurance policy, or ‘free-standing’, just providing the critical illness conditions.
When a Critical Illness Cover policy expires, it has no value. This means that if you do not die within the term, you will not receive any money back. Think of it as the same as car or house insurance. If you don’t claim, there is nothing back.
Why use Critical Illness Cover?
If you want to guarantee a lump sum is produced when you fall ill, or need time off to undergo and recover from an operation, within a pre-determined period, you could use this policy. It is entirely suitable for single people who may not need traditional life assurance cover.
Is it really right for you?
Yes, if clearing the mortgage would be a top priority in case of serious illness.
Yes, if you have dependents and no other household income to repay the mortgage.
No, if you have enough funds available.
No, if you want to be covered for a wider range of health problems – consider income protection insurance instead.
Maybe, if cover would not be available to you because of an existing illness. However, insurers may accept you at a different premium level.
It really can make a difference !
Having a critical illness policy in place when you need it can really make the difference. It’s could be the difference between having a heart attack and no mortgage, or having a heart attack and no home !