Critical Illness Cover
Cover against serious illness
Critical Illness Cover is an insurance policy designed to pay you a tax-free lump sum should you be diagnosed with a specific life-threatening or debilitating (although not necessarily fatal) condition such as a heart attack, certain types or stages of cancer and multiple sclerosis.
How much cover do I need?
It depends on how much of a tax-free lump sum you believe you may need – it is not a replacement for income. It should be enough to cover known or anticipated household expenditure including mortgage payments, food, loan repayments for as long as you imagine or anticipate being unwell.
Are all conditions covered?
No. Different providers have different specified lists of conditions, exclusions and limitations. For a condition to be covered it must meet the description in the policy definition precisely.
Permanent total disability
This is usually included in a Critical Illness policy and it relates to your capacity to perform or not perform tasks whilst unwell or incapacitated. Some insurers define permanent total disability as being unable to work, others as being unable to perform some everyday tasks.
Most Critical Illness policies will only pay out after a ‘survival period’ of 28 days from the point the policy becomes active – so not from the point of diagnosis.
How much will it cost?
It depends on factors including the amount you want the policy to pay out, your age, and your state of health.
It’s also important to make sure you have enough cover because over time your circumstances change and your responsibilities and liabilities increase.
Some policies allow you to increase your cover, particularly after lifestyle changes such as a marriage or having children. If you cannot ‘top-up’ on an existing policy it may pay you to take out another.
What are the options?
Some policies offer combined life and critical illness cover. These pay out if you are diagnosed with a critical illness, or you die, whichever happens first.
There are other ways to protect those you care about from financial hardship. Income Protection is a policy designed to pay-out an income should you be unable to work due to an accident or a long-term illness. Life Assurance – policies that pay out a tax-free lump sum or an income when you die.
Knowledge and expertise
Critical Illness Cover has a reputation for being complicated and expensive. Our qualified advisers are able to guide you through the choices, cover levels and processes to get you the best policy to suit your needs.