If you are fit and healthy, you may not have considered Critical Illness Cover – it’s easy to take your health for granted… until you, or a loved one, experience poor health and all the problems this can throw up.
Sadly, critical illnesses are not rare: for example, 1 in 3 of us will get some form of cancer in our lifetime. It’s not all doom and gloom, though, and survival rates are improving.
Whereas many of us consider what will happen if we die, few consider the financial implications of a critical illness.
- How will you pay your mortgage?
- What if you need to be off work for an extended period?
- What if your partner needs time off to care for you or your children?
- What if you need special equipment or adaptations to your home?
There are any number of scenarios to give thought to. Critical Illness Cover can reduce the financial burden if you are too ill to work and need time to recuperate.
Why Would I Need Critical Illness Cover?
We don’t plan on getting ill. Unfortunately, no matter how health-conscious you are, illnesses are unpredictable. Like any other insurance, you hope you won’t need it… but it’s there just in case.
Most of us wouldn’t think twice about home insurance – just because we have it, doesn’t mean we’re expecting a fire or flood! Why would you think any differently about your body?
Critical Illness Cover provides:
- peace of mind
- financial security when you need it most
- relief from the financial burden which could otherwise fall to your family
How Does It Work?
If you are diagnosed with a specified critical illness during the term of your policy, Critical Illness Cover will pay a tax-free lump sum, which you can use however you want.
Critical Illness Cover will usually only pay out once, then your cover will end.
It’s really important when looking at Critical Illness Cover that you look at the circumstances in which it would pay out (and any exclusions). The illnesses covered varies between insurers.
What Is A ‘Critical Illness’?
What constitutes a ‘critical illness’ depends on the insurer so read up before you purchase a policy. Some of the illnesses normally covered are:
- Heart attack/ heart conditions
- Major organ failure or transplant
- Blindness/ deafness
- Parkinson’s disease
Some insurers will only pay if a condition reaches a certain stage or level of severity.
How To Get Critical Illness Cover
It’s a simple process, but be prepared to answer lots of personal questions about your health… and answer them honestly!
To get a quote from an insurance provider, you’ll have to provide details about your:
- Employment status
- Known health conditions
- Health conditions in your family
- Alcohol consumption
- Smoking/ drug-use
- Weight/height/ waist measurements
Sounds a bit much, but it’s all used to assess the likelihood of you getting a critical illness and to set your premium.
Although it may be tempting to be economical with the truth (in order to lower your premium) any inaccurate information you give could affect your eligibility in the event of a claim.
Things To Consider
Usually the ‘best deal’ means the cheapest deal, however, this often isn’t the case with insurances – you want to find the right level of cover for the most affordable price. The level of cover you will need depends on your own personal circumstances.
You should consider how much money you’d need to continue to meet your financial obligations, such as mortgage or rent, household bills, day-to-day living expenses, childcare, and balance this with the affordability of the policy premium.
How To Make A Claim
If you are diagnosed with a critical illness, you need to inform your insurance policy provider as soon as possible. They will request access to your medical records in order to confirm your situation.
Once your illness has been verified and proven to be true, you can receive your lump sum payment.
Reasons Your Claim Could Be Invalid
- Your particular illness is not covered
Unfortunately, no matter how severe an illness or condition is, if it’s not stipulated in the insurer’s list of critical illnesses, you won’t have a claim.
Therefore, it is so important to check what is (or isn’t) included in your policy. For example, some more treatable cancers will not be covered.
- You’re not ill enough
The last thing you want to hear when you’re poorly, is ‘it’s not that bad’… but some insurers will only pay out if you are at a certain, more severe, stage of cancer, for example, or if your illness is deemed to be serious enough.
- You’ve provided inaccurate information
If you have failed to disclose known health conditions or made false claims about your lifestyle, it could nullify your policy.
- You’ve not kept up your payments
If you don’t pay your premium, your cover will stop and you won’t be able to make a claim.
I’ve Made A Claim. How Long Will It Take To Receive A Pay-Out?
Successful claims are usually paid out in around 30 days.
Critical Illness Cover – Is It Worth It?
Unless you are in the fortunate position where you have savings to cover any loss of income, treatment you might need, and living costs for you and your family, it is worth thinking about Critical Illness Cover. It could provide an invaluable financial lifeline if:
You don’t have savings – if you are reliant on your income to cover day-to-day living expenses
You are single – you may not be able to afford continuing rent or mortgage payments and bills alone, without your usual income, if you fall ill.
Your employer doesn’t offer a benefits package that covers long-term sickness
State benefits wouldn’t cover your outgoings – would you be able to meet your financial commitments if your monthly outgoings are higher than any benefits you’d receive during your illness?
You’ve got a family
Is there a maximum age limit?
Yes, sometimes insurers put a maximum age limit on critical life insurance, because the risk of getting a critical illness increases with age. Typically, critical life cover is available if you are aged between 18 and 65.
Can I get critical illness cover for my children?
Yes, some policies include it, but the maximum sum is usually lower. Again, you’ll need to pay close attention to the T’s & C’s but it can be a huge help if you need time off work to care for a sick child.
What happens if I miss a payment?
If you stop paying, you are not covered in case you get a critical illness.