Critical Illness Cover
Suffering a serious illness such as a heart attack, affects on average twenty percent of men and twenty five percent of women before they are due to retire.
Critical illness policies are designed to pay out a tax free lump sum if you are diagnosed with a serious life threatening illness. You must survive for a period of time after the diagnosis, this varies between providers but the standard is 28 days.
Under the Association of British Insurers guidelines all CIC policies should cover seven main core illnesses. These are coronary artery bypass, cancer, heart attack, major organ transplant, kidney failure, strokes and MS. Most policies will also pay out if the insured person becomes permanently disabled as a result of illness or injury.
If you are single with no dependants then Critical illness cover might be important to you as you could use the money to pay off a mortgage. For some people this is more important than having life cover. It can also be useful if you are married or in a long term relationship. It could provide much needed financial support at a time of emotional upheaval and financial pressures.
How to get cover
To take out critical illness cover you will need to find out which provider offers the most suitable type of cover according to your needs.
When you apply for the cover you need to decide how long you want the policy to run for, as well as the amount of cover. The cost will depend on your age, health, the amount of cover and term.
The insurance company may want to write to your doctor to obtain your medical information. In some cases you might need to attend a medical before being accepted for cover, but this does not always mean the cost will be higher. One factor that will affect the cost is whether you are a smoker or non smoker.
It is important that you are honest and provide the insurance company with full information about your medical history. Even if you are unsure whether the information is relevant or not it is best to disclose it. If you do not provide all the information and you later need to claim the insurance company will write to your doctor. If you have not disclosed information then the insurance company might not pay out on the policy.
Not all policies are the same
Choosing the right plan can be very complex. There are many providers all with various policy definitions and policy features.
Policies vary considerably in the illnesses they cover. The cheapest policy might not offer the best range of cover for you. We would always recommend speaking to an independent financial adviser that deals with critical illness on a regular basis.