Life is a game of chance, so none of us really know what hand we’ll be dealt. It doesn’t matter if you are fit as a fiddle, there are some things in life we just can’t control - an unexpected illness being one of them. Whilst Life Insurance covers you for death, Critical Illness insurance covers you if you were to receive an unfortunate diagnosis.
So, how does Critical Illness insurance work?
What is critical illness insurance?
Critical Illness insurance is a type of life insurance cover that pays out a tax-free lump sum payment if you’re diagnosed with a critical illness. It provides you with financial support to cover the income you may have lost from not being able to work.
It’s only natural for us to look at the positives in life. Many of us don’t think about the possibility of becoming critically ill, but the truth is, there’s very little we can do about it. However, what we can do is put something in place to ensure that ourselves and our loved ones would be protected financially, should the worst happen - that’s where critical illness insurance can help.
Talk to a Critical Illness expert today...
How it works
Providing you’re diagnosed with one of the critical illnesses listed in your policy, meeting their specific definition and severity, your insurer will pay-out a one-off lump sum. Once the policy pays-out it then ends.
When you take out cover, you begin paying monthly (or annual) policy premiums - as with most insurances, you need to keep up with your payments in order to stay covered. Critical illness insurance can also be added onto an existing life insurance policy. This way you’re covered for both death and critical illness.
Whilst you may receive support from your employer - such as statutory sick pay, it may not be enough to fully support yourself and your family. Nobody wants to be a financial burden for their loved ones, especially if you are the main provider for your family.
Critical illness insurance can be used to support you and your family with:
Household bills
Private healthcare
Specialist medical treatment
To pay towards debts, loans and mortgages
Cover for the earnings lost due to illness
Paying for accessibility changes to your home - such as a wheelchair ramp
Before opting for a policy, it’s always best to assess you and your family's needs. Even if you live alone, critical illness insurance can act as financial support during this difficult time. If you feel you need some help assessing your needs, why not consider speaking to an adviser, as they will be able to support you through the entire process.
What illnesses does critical illness insurance cover?
If you are diagnosed with a critical illness covered by your policy, the insurer will issue you with a pay-out. The type of illnesses covered by critical illness insurance can vary depending on the provider.
Some of the critical illnesses typically covered are:
Heart attack
Stroke
Certain cancer types and stages
Organ failure
Parkinson’s
Alzheimer’s
Multiple sclerosis
Major head injuries
Some insurers may also cover permanent disabilities such as a loss of limbs or blindness. It can also pay-out if you have suffered a disability due to a severe injury. It’s important to remember that Pre-existing conditions, hereditary illnesses, and temporary illnesses are not covered by critical life insurance.
What affects the cost of critical illness insurance?
As with most types of life insurance, there are a few conditions that can affect the cost of your premiums and pay-out amount. Prior to taking out a policy, your insurer will ask you some routine questions to determine the value of your policy. The cost of a policy is affected by:
Age
Health
Occupation
If you’re a smoker
Family medical history
Level of cover (i.e. the sum assured)
Length of cover (i.e. the policy term)
The cost of life insurance increases as you get older, so it’s best to take over cover as soon as you can. These days, getting a quote has never been easier. At Cavendish Online, simply complete our online form to find out how much your policy would cost.
What’s the difference between critical illness & terminal illness cover?
Though they sound similar, critical illness insurance and terminal illness cover work differently. The big difference is that critical illness usually pays out when you are diagnosed with an illness that isn’t considered immediately life-threatening.
Terminal Illness cover, on the other hand, typically pays out if you’re diagnosed with an illness where you’re expected to die within 12 month (though as always it is worth checking your policy schedule to see your chosen providers definition of 'terminal illness', and when you might be able to claim).
For more information on critical illness insurance as well as any life insurance, get in touch today. At Cavendish Online, we’re dedicated to helping you find the best policy for an affordable cost.
Speak to the experts...
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance, Critical Illness Insurance and Income Protection.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
01392 43 61 93(Monday to Friday, 9am - 5.30pm)
