Life Insurance - Critical Illness Cover
Critical illness life insurance is designed to offer a payout to you in the case of your diagnosis with one of a number of diseases or conditions. Here we will talk you through the ins and outs of critical illness cover.
Critical Illness Insurance - What is it?
Just like life insurance in general critical illness cover is not something that people like to envisage themselves needing. However we can't have complete control over our future and you can never know if you will need this type of cover one day.
Critical illness cover can be a great way to have peace of mind about the fact that your family will be financially cared for in the case of you becoming seriously unwell. It is aimed at helping you if you find yourself unable to work and therefore earn due to a serious medical condition.
This can be particularly helpful if you do not have enough set aside in savings to make sure that you and your loved ones can continue to pay your living costs. Most people do not have enough to provide this kind of financial security to their family or at least not for an extended period of time.
This type of cover will pay out an agreed upon, tax-free, lump sum in the event of your diagnosis with any of a number of diseases. It is possible to purchase critical illness cover as a individual policy and it can also be purchased as an add-on to any existing life insurance plan.
Do You Need Critical Illness Cover?
Critical illness cover can be a very good idea if you don't have a huge amount of money saved away. This is because it can ensure that you don't fall behind on your mortgage payments or on other loans in the event of your illness. It is normally paid out as a lump sum which you can then spend accordingly.
This type of insurance can also be very helpful if you are the main financial contributor to your household. If you unexpectedly find yourself unable to work because of a sudden illness, you may find it difficult to maintain your families standard of living if you have to rely on your savings alone.
Unlike many forms of life insurance, critical illness cover can still be a vital source of aid for somebody who does not have any dependents. The reason for this is the fact that if you were to fall ill and could not earn, you would still need to be able to pay your rent or your mortgage.
Critical illness cover can remove a great deal of stress in the case of your illness, the last thing that you want to have to think about when you fall ill is whether or not you will be able to stay in your home. Critical illness can make sure that this doesn't happen and provides a sense of security that can be invaluable in those types of circumstances.
What Does Critical Illness Insurance Cover Me For?
Many insurance policies vary quite greatly when it comes to what types of illness the plan actually covers. Having said that, there are many illnesses or conditions that must be covered by any critical illness scheme.
All forms of this insurance must cover the "core" conditions that have been specified by industry regulations. These conditions include cancer, heart attacks and strokes. From that point onwards however, the policies vary greatly in terms of the level of their cover. You may find some policies that cover you for around 50 different types of illness, from more common conditions such as Alzheimer's or multiple sclerosis.
As with other types of insurance, the cost of the policy will go up depending on how likely the insurance company thinks you are to make a claim. This means that if you get a policy that offers you a greater range of cover and offers protection from a larger number of diseases, you will likely have to pay a lot more than if you got a policy that covers a less extensive range of situations.
Terminal Illness Cover
It is important to be aware that critical illness cover is not the same as terminal illness cover. Terminal illness cover is normally included on most different life insurance plans. This form of insurance will pay out if you are diagnosed with a terminal illness and a doctor has stated that you have no more than twelve months to live. Critical illness is different to this because it will pay out on illness that you may have a chance of recovering from.
It has been shown that we are statistically 500% more likely to claim on a critical illness insurance plan, than we are to claim on life insurance. This means that critical illness cover is often much more expensive than life insurance alone. Even though it is more expensive, it is important to state that the value of critical illness cover cannot be exaggerated. The security that it offers can often prove to be a godsend for those who receive it.