Do You Need Critical Illness Cover?

No one knows what is around the corner, and it can be incredibly comforting to know you have financial protection in place, should you be diagnosed with a specified critical illness.

Whether you have considered taking out critical illness cover before or not, you likely have one question; do you really need it? The best way to answer this question is to think about how your life would be impacted if you did suffer from a critical illness.

What is critical illness insurance?

Critical illness cover is a type of insurance policy that can provide a lump sum pay-out if you were diagnosed with a specified illness. You must already have taken out the policy before you are diagnosed.

This type of policy can provide a helping hand during unforeseen circumstances. Critical illness insurance will cover a variety of illnesses at certain stages, but it does not include terminal illness. Your policy document will explain in more detail what is and is not covered.

Some examples of what might be covered include certain severities of a stroke, heart attack, some types and stages of cancer, and conditions such as multiple sclerosis or Alzheimer’s. It is important to check with your provider for a more detailed list of what is covered, and familiarise yourself with it.

Why do people buy critical illness insurance?

In some cases, if you fall ill then you receive state benefits or an employee benefits package to cover your time off work. However, this is not always enough, particularly if you are diagnosed with an illness or disability. If you have to take prolonged time off work, or you need to pay for medical care, you may need an insurance policy to provide you with financial support.

Critical illness cover can help if you do not have enough savings to fall back on during your time off work, or if you do not have the benefits in place to cover a long time off work. After all, you still need to meet financial commitments such as your mortgage, bills and potentially childcare.

Whether you have children or not, being diagnosed with a critical illness can have a huge impact on your everyday life. Worrying about your financial commitments should be the last thing on your mind, which is why critical illness cover can be so beneficial.

What is the benefit of a critical illness policy?

Critical illness cover is an insurance policy that can pay out while you are still alive, which means you benefit directly from the monthly premiums you pay for your policy. We never know when we might fall ill, but a critical illness policy can help to mitigate some of the impact a diagnosis might have on your lifestyle.

Critical illness cover will pay out if you are diagnosed with an illness that is listed in your policy, within your chosen term, and the pay-out is tax free. The pay-out from a policy of this kind can be used for whatever you deem necessary; this can include mortgage repayments, private medical treatment, home alterations or other expenses.

You can decide how much cover you need. This is usually determined by factors such as the monthly cost of your mortgage, daily living costs and other essential outgoings.

The benefits of your cover may change depending on your provider, but in some cases critical illness cover will also offer protection for your children.

Does life insurance include critical illness?

Life insurance does not always include critical illness cover, but you have the choice to take them out together. There are two types of critical illness, known as combined and separate. This gives you more flexibility when taking out the right cover for your needs.

Combined cover is where you add critical illness cover to your life insurance policy. They are taken out at the same time, and you only pay one monthly premium. It is important to note that this type of cover will only pay out the full payment once; so, if you claim on the critical illness part of your policy, you will no longer be covered for life insurance.

You can take out life insurance and critical illness cover separately. While this means you will pay twice, you will be covered and protected for both circumstances.

The policy you choose will largely depend on your personal and financial circumstances. Everyone is different and will require different types and amounts of cover. To find out more and get a free quote, get in touch with us today.

Please note the above does not constitute as financial advice and may change dependent on individual circumstances and budgetary requirements.