If you’re of working age and you are looking to protect your family against the worst happening, you may have considered critical illness cover as a safety net. This is especially the case if you own your own home, but believe it or not, 8 out of 10 UK homeowners have no kind of income protection against serious injury or illness.
Here we look at a few things that you really need to think about before you take the plunge and open a critical illness policy. By reading to the end, you’ll gain a better understanding of whether critical illness cover is for you or not. So, strap yourself in while we go through a few of the ins and outs of critical illness insurance.
What Exactly is Critical Illness Cover?
Essentially, critical illness cover provides the peace of mind of knowing that if you were to unexpectedly fall seriously ill, leaving you unable to work, you will receive financial support. It differs from other types of income protection that pay out a regular monthly amount in that it provides a one-off lump sum. In order to find the right policy for your needs, there are quite a few variables that you need to consider.
What Conditions Does Your Policy Cover?
The fact is that there are many different providers of critical illness cover out there and they all vary with regards to the conditions they cover. Some people have found out how much variation is to their detriment when they tried and claim and got turned down. So, it’s important to clarify exactly what you’re covered for.
However, there are seven core conditions that most will cover:
● Cancer (variety depending)
● Coronary artery bypass
● Kidney failure
● Heart attack
● Kidney failure
● Multiple sclerosis
Permanent disability caused by illness or injury is also usually covered by most policies. We can’t stress enough though that you should check precisely with your insurer what you’re covered for.
So, Who Stands to Benefit Most from Getting Critical Illness Cover
A successful payout on a critical illness policy can amount to hundreds of thousands of pounds and you’ll usually find that it’s tax-free. This money could be used to pay off your mortgage, pay for any care you might need or just used to live on.
You should seriously consider critical illness insurance if:
● You don’t have enough savings to cover you if you were to become seriously ill
● You’re not covered by any employee health benefits
● You wouldn’t be able to survive on state benefits of around £100 each week
● You have dependents who would otherwise not be financially supported
What you have to be very aware of, however, are exclusions, as there are often specific caveats that determine whether you’re able to claim or not.
Be Honest When You Take Out the Cover
When you first take out your policy, it’s vital that you’re honest about any pre-existing medical conditions you might have as it could negate your policy if you don’t. Given that the whole point of the cover is to protect you if you do something that invalidates it, it doesn’t really make sense.
Being 100% honest about your health and your lifestyle could mean that you pay a higher monthly premium, but that’s far better than paying less for something that’s not worth the paper it’s written on. We’d advise to not automatically go for the cheapest option either, as you will likely not be given the full cover you need.
Talk to an Insurance Professional Before You Sign Anything
When you take out critical illness cover, you should have full understanding that it’s the right product for you, rather than, say, life insurance or income protection. They are similar-sounding products, but they offer very different things. That’s why you should always talk to a trustworthy insurance professional who can explain what the best solution is and why. It’s just too important to take chances.
At Be Money Savvy, we are fully committed to helping our customers live more savvy financial lives and we create blogs like this one to demystify what can be a very confusing industry. If you would like to know more about anything discussed here, head to our website www.bemoneysavvy.co.uk where you’ll also find details of our comprehensive home and life insurance policies.
Alternatively, if you need specific advice from one of our experts, give us a call on 0161 537 0555 today and we’ll be delighted to help in any way we can. Thanks for reading. We hope that you’ve found it informative and that it helps you find the perfect income protection.