Life can throw us a curve-ball at any time. Your health may be good at the moment, but no one knows what’s around the corner.
Critical Illness Cover is an insurance product that can protect your earnings if you were unable to work due to serious illness or injury.
This article will outline how it works and what you should take into consideration before taking out this insurance.
Critical illness cover is designed to insure your finances should you develop a medical illness, injury, or disability, which prevents you from working. The policy will outline a number of specific medical conditions which can be covered under the insurance product. These conditions will vary from provider to provider, as well as the severity of illnesses. A payout of a tax-free lump sum is designed to help you adapt to your new lifestyle, as a result of developing a severe illness or disability. Often the payout will be substantial, as your premiums will be decided, in part, by how much your outstanding mortgage is. Also, the cover may be calculated by how much money you think you might need to take care of your dependents and other bills. Dependents are children under 18 who would suffer if you were unable to return to work.
Please Note: Critical Illness cover offers protection in severe, life-threatening, circumstances. It is, therefore, different to income protection insurance. With income protection, the cover is designed to supplement income in times of illness, with the hope that you would be able to return to work eventually. Find out more about Income Protection Insurance here.
Some of the medical conditions covered by many policies include;
This type of policy is designed to payout only once, in the form of a tax-free lump sum. After this, your policy will end. However, some deals will offer smaller payouts for less severe conditions.
Please Note: This type of insurance is not designed to payout upon the policy holder’s death, you may need to look at life insurance as an additional product to cover this. Find out more about the many different Life Insurance types here.
This form of financial protection would be suitable for the majority of workers. You can even find cover if you already have a medical condition. Although, please note, your premiums may be more expensive and not all providers can insure you.
Your employee package may already include some cover for sickness. This kind of protection is designed to supplement your existing ‘sick pay’ provisions.
Gerald took out critical illness insurance seven years ago, when he became self-employed. He paid £75 a month towards his premiums over the seven-year period, until one day he suffered an unexpected heart attack. Gerald was in good health up until that point, but he needed to claim on his critical illness cover, to keep up with his mortgage payments. Gerald was successful in his claim and received £155,000.
All critical illness providers will require you to answer some questions about your medical history before accepting you onto their plan. Some may ask you to take a medical examination, which can be arranged for a time and place that suits you best. You may also be asked about your family’s medical history, your general lifestyle habits, as well as your weight and occupation etc.
As a general trend, those who are younger, have an average BMI and do not smoke or drink heavily, will find that they will pay less in premiums for critical illness cover. This is, of course, dependent on the level of cover you wish to pay for.
It is vital that you answer the insurer’s questions honestly, as your answers will be used to calculate your premium payments. Plus, if you do become ill and make a claim and, for any reason, the information you supplied was proven to be false, you may invalidate your policy and receive nothing.
You can receive a free, no-obligation Critical Illness Insurance quote, all you have to do is fill out this brief form, and an advisor will get back to you to assess your needs and find you the best cover.
I needed life insurance and critical illness for myself and my wife. I got a number of quotes from some of the big brands and was very happy with the final price. Mike Davidson, Birmingham
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* Life insurance from 20p per day is an illustrative figure only and may not be available to you. The figure is based off of a 25 year old non smoking female taking out £150,000 of term assurance over 25 years on a level term basis and available from Beagle Street. Figure accurate as of 19/03/2015.
* Life insurance & Critical Illness from 35p per day is an illustrative figure only and may not be available to you. The figure is based off of a 25 year old non smoking female taking out £150,000 of term assurance over 25 years on a level term basis along with £50,000 of critical illness cover and is available from Beagle Street. Figure accurate as of 19/08/2015.
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