I've got Life Insurance - why would I need Critical Illness
Cover?
If you have life insurance then you know that a lump sum of
money will be paid to the beneficiaries of your policy should
you suddenly pass away. You will probably have this policy for
peace of mind to reduce the financial burden you death might put
on any dependents you have, and assist them in settling your
estate.
Statistically however, you are six times more likely to suffer
from a critical illness than die before you reach the age of 65.
Advancements in the field of medicine mean that today we are now
surviving the illnesses that might have meant an early grave for
previous generations. In this situation your life insurance is
unlikely to be able to assist you, but an alternative is
available; you might consider obtaining critical illness cover.
Critical Illness Insurance will cover you if you are diagnosed
with an illness listed on your policy and, as with life
insurance, pay out a tax-free lump sum. This can help with any
financial difficulties that sudden diagnosis of a serious
illness might bring you. If you were to be diagnosed with a
serious illness today and were unable to continue working you
may face several financial problems at once; you may have a
mortgage payments to make, you might run your own business and
need to arrange cover or you illness may require additional
medical treatment not covered by your standard health insurance
policy.
A standard critical illness insurance policy will cover you for
the following illnesses:-
Cancer
Coronary artery by-pass surgery
Heart attack
Kidney failure
Major organ transplant
Multiple Sclerosis
Stroke
However, you may also cover additional critical illnesses under
your policy, you will need to check with the individual
insurance provider as to which other illnesses they may cover.
Do be aware though that there are fairly strict definitions as
to what constitutes any one particular critical illness. For
example if you were to suffer from Angina, this would not come
under the Heart Attack section of your policy, even though it is
a serious heart condition. In addition to this you will normally
need to survive your critical illness for at least 28 days from
diagnosis in order for your policy to pay out. There are further
exclusions to your policy too, for example you cannot reasonably
refuse medical treatment that leads to the development of a
critical illness.
Obtaining critical illness cover is a fairly straightforward
process you will need to complete an application form, and
probably undertake a medical assessment. Your premium will
depend on your health status at the time of application along
with your family medical history. If you are a smoker you will
definiately pay higer premiums. It does pay to shop around for
your cover, some providers will offer additional free coverage
for your children or a joint policy may be more cost effective
than individual policies.