TL;DR
Critical illness cover - key points
Critical illness cover may pay a benefit after diagnosis of a condition listed in the policy wording.
The payout can help with treatment costs, bills, mortgage payments or time away from work.
Have you ever wondered what would happen to you and your loved ones if you were diagnosed with a serious medical condition? Critical illness cover is a type of policy that offers protection in the event of a serious medical event. The illnesses that are covered are usually long-term and very serious conditions, such as stroke, heart attack, loss of arms or legs, cancer, multiple sclerosis or Parkinson’s or Alzheimer’s disease.
How does critical illness cover work?
If you are diagnosed with a serious illness or accident, the insurance company will pay a predetermined amount to the policyholder, who can then use the funds as they see fit. In return for regular premiums paid, you will be entitled to a benefit that will allow you to cover your essential expenses.
Find out more about this at a free consultation with our adviser and on the Moneyhelper website.
Do I need a critical illness cover?
If you don’t have enough savings to cover all of the necessary expenses that might appear if you become seriously ill or disabled or if you don’t have an employee benefits package to cover a longer time off work due to sickness you most definitely need a critical illness cover as an option. It will provide you with the financial protection needed upon diagnosis of a critical illness or disability specified within the policy.
What does critical illness insurance cover?
Critical illness cover policies do not include all illnesses. They cover a closed catalogue of ailments of a serious nature. Typical illnesses include heart attack and stroke, many cancers, Alzheimer’s disease or orthopaedic injuries such as spinal fracture, amputation of an arm or permanent leg damage.
The scope of each insurance policy is slightly different. The level of cover will depend both on the insurance option (and therefore the premiums) but also on the insurance company’s policy. Some policies cover only a dozen or so illnesses, while others will cover more than 50. It is for this reason that it is worth talking to a certified adviser, such as Extend Finance. By taking responsibility for their advice, such a person will help you to make an informed and rational choice, and this is extremely important. It is, after all, about your financial security.
In some cases, you will be able to add insurance for your child to your policy. If you are a parent, be sure to consider this option!
How much critical illness cover do I need?
The amount of cover you need will vary depending on your personal circumstances. To decide which type of cover to take out, consider what costs you would want to be covered financially if you were to become critically ill. Maybe you would want your future medical costs covered? Or would you need some extra financial help to cover any debts or everyday costs? The extra cash sum could help towards your mortgage, rent, childcare costs, and living expenses or even pay for medication or changes to your home. If you need help choosing the right cover, contact us and we’ll help you make the right decision.
Please contact us if you are interested in purchasing a critical illness policy, have questions about it or need professional advice.
Frequently asked questions
Is critical illness cover the same as life cover?
No. Life cover usually pays on death, while critical illness cover pays after diagnosis of a covered condition.
Does every illness qualify?
No. The condition must be listed and meet the insurer’s definition.
Does health affect the premium?
Yes. Insurers assess age, medical history, lifestyle and smoking status.