Critical Illness cover: What it is and why you need it

Category: News

As part of your financial plan, it’s important to prepare for the unexpected. This means having an emergency fund in place, factoring in potential future expenditures like the cost of care, and ensuring you have a Power of Attorney in place.

It should also mean thinking about insurance and protection.

One form of protection you should consider is Critical Illness cover. It can give you and your family financial security as well as peace of mind, should the unexpected happen.

What is Critical Illness cover?

Critical Illness cover is a type of insurance that will pay out a lump sum, or ongoing payments if you are diagnosed with certain conditions during the term of the policy.

Critical illnesses might include:

  • A stroke
  • A heart attack
  • Certain cancers
  • Multiple sclerosis

Conditions that are included will vary by individual policy and provider, but might also include organ transplants, Parkinson’s disease, deafness, traumatic head injuries, and bacterial meningitis.

Be sure to check your policy carefully as you’ll only be covered for the conditions listed.

If you need to make a claim, the money you receive can help to cover the cost of treatment, home adaptations, or replace your income if you are no longer able to work.

Critical Illness cover is often combined with Life Insurance, but you will likely find that you can only claim once. If you become critically ill and receive a lump sum, the policy ends.

Speak to us if you are considering taking out protection or making a claim. We can help to decide the best policy for you. We can also help you find out what you are covered for if you have a plan in place already.

Why do I need it?

No one likes to think about the possibility of getting ill, but any good financial plan should include an element of guarding against the unexpected. The coronavirus pandemic has highlighted the speed with which the unexpected, and in some cases the unprecedented, can occur.

All forms of protection product, from Life Insurance to Income Protection, should be considered when formulating a long-term financial plan.

The Association of Business Insurers (ABI) reports that ‘the insurance industry paid out more than £5.7 billion in protection claims in 2019.’

That’s £470 million more than in 2018 and includes almost 18,000 new Critical Illness claims with an average payout of over £67,000.

You might need Critical Illness cover for a variety of reasons.

Maybe you want to ensure that your mortgage could still be paid off if you became ill? Or that your family would be provided for if you were no longer able to work? If you and your family depend heavily on your salary, Critical Illness cover should be a serious consideration.

What won’t I be covered for?

If a condition is not listed on the policy when you take it out, you will not be covered for it.

It’s also unlikely that you’ll be covered for any pre-existing health conditions – those you knew you had when you took out the insurance.

We can help you find the right product for you, ensuring you know exactly what you are and aren’t covered for. And because we take the time to get to know you – your finances and your personal circumstances – you can be sure that the cover you receive will exactly match your needs.

How much will I have to pay?

Premiums are most often paid monthly and the amount you pay will be based on factors such as:

  • Your age
  • The amount of cover you take out
  • Whether you smoke or have previously smoked
  • Your health (this will include your current health and family medical history)
  • Your job (some higher-risk occupations might have higher premiums)

You’ll likely have to provide details of your medical history too. Ensure you’re as honest as possible because any false information could be used by an insurer to invalidate your claim.

The next step

It’s never too late to add protection products to your financial plan.

If you have dependents who are reliant on your income – whether for school fees, to help pay off the mortgage, or just for day-to-day expenditure – you could benefit from Critical Illness cover.

No one wants to think about the prospect of becoming ill. But if the unexpected happens, you’ll have the peace of mind that your dependents are financially secure and looked after.

And because we take the time to get to know all of our clients, you can be confident that the protection you choose will be right for you.

Get in touch

Planning for the unexpected can give you enormous peace of mind that you and your family will be financially secure if you find yourself without a regular income.

If you’d like to discuss your long-term financial plan and using Critical Illness cover to guard against the unexpected, get in touch. Please email or call 020 8891 0711.