Critical Illness Cover
Critical Illness Cover
If something happens in life that prevents us from being able to work/produce an income, it can have serious implications for you and your family, causing financial worries on top of what can already be a difficult and worrying time.
Critical Illness cover is an insurance policy that helps protect you if you become critically ill during the policy term. If you make a claim, it pays out a tax-free lump sum that you can use however you like, to help cover health-related costs, monthly expenses, or replace lost income whilst you recover. In the event of a claim, you would receive the sum assured and the policy would terminate.
Critical Illness cover
Frequently Asked Questions
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How much does Critical Illness cover cost?
The cost of critical illness cover will often take into consideration your occupation, age (the older we are, the higher the risk of us suffering from a critical illness) and current state of health, including your height, weight, family history, and whether you’re a smoker.
During the underwriting process the insurer will take into account any pre-existing medical conditions and make a decision whether to provide cover at standard premium rates, include any exclusion to claims, or decline to offer terms of cover.
Critical Illness cover can be arranged on a level term sum assured basis, or on a decreasing sum assured basis, much the same as level term and decreasing term insurance. -
Do all Critical Illness providers offer the same level of protection?
Critical Illness providers can often have a different levels of cover, typically known as a ‘budget’ plan and a more ‘comprehensive’ plan. Not all providers offer the same depth of cover, so should not be compared on premium cost alone.
Some providers have more definitions of cover than others, though it’s important to also understand what core level of cover being provided in the associated higher risk categories, as well as understanding what constitutes a valid claim in a specific risk category.
Some providers also place limitations on the amount they pay out for certain critical illness claims types. Therefore, this should not be considered as a substitute for having suitable income protection. -
What is the difference between Critical Illness Cover and Income Protection?
Critical Illness cover is designed to pay out a lump sum in the event of a critical illness, as per the policy terms and conditions.
With Income protection, after a predetermined deferment period, the policy will pay out a monthly amount for a given time, if your sickness, illness or disability prevents you from working, as per the policy terms and conditions.
It is key to understand that not all critical illnesses will necessarily result in you being unable to work.
