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Critical Illness

Guide to Critical Illness Insurance

This Guide is supplied for general information only. You should seek specific advice for your individual circumstances before acting on any suggestions made.

What is Critical Illness Insurance?

Critical Illness Insurance covers an individual for life or for a set period against a number of serious illnesses, diseases and medical conditions. It pays out a single tax-free lump sum on the diagnosis of one of the illnesses specified in the policy details.

Please note different providers use different definitions in relation to Critical Illness Cover and that a policy would only pay out if the customer services a predetermined time period following diagnosis unless the plan also included life cover.

What are the benefits?

Critical illness insurance normally pays a lump sum if you are diagnosed with one of a number of specified 'critical' illnesses during the term of the policy. There may be a requirement that you survive for a period of 28 days following the date of diagnosis for the policy to pay out, as the policy is intended to cover living expenses.

You could use the cash payment from the policy either to pay off a debt (such as a mortgage) or to provide you with an income if you become too unwell to continue working or for any purpose you choose.

It is common for a critical illness policy to be combined with a life insurance policy to provide two types of cover. If you decide to purchase one of these combinations you should bear in mind that you will only be able to claim if you contract an illness, as defined in the terms of the policy, and you may lose the life cover element unless you have bought additional life cover.

What different types are there?

Critical Illness policies cover numerous specified illnesses and cover varies from insurance company to company. It is important that when taking out a policy you understand which illnesses are covered by your plan.

Can I effect a policy that covers myself and my partner?

You can have a joint policy with your partner, and this may prove to be cheaper than having two separate policies, but bear in mind that if one partner contracts an illness on the policy list, the other partner's cover will cease as the policy has satisfied its intended function.

Like many types of Insurance the prospect of having more than one person covered under the same policy is an important aspect of the planning required. If you need any assistance in deciding which approach is best for you then contact us.

What should I think about when choosing a policy?

Firstly you should decide the sum of money you would need if you were diagnosed with an illness which prevented you from working again. You might need to pay off a specific debt like a mortgage, arrange for nursing care or pay for further medical assistance. Your dependents are likely to need an income which will allow them to continue to live in the same way as they had prior to you giving up work.

When you want to compare policies from different Insurance Companies it is very important to consider the illnesses that they cover before you compare the price that they charge. If you need assistance in deciding on the right policy for you simply click the contact us button.

For pure protection insurance, we offer products from a range of insurers.