Why do I need Critical illness Cover?

Critical illness offers a one-off payment if someone is diagnosed with a serious illness, while income protection offers a monthly pay out if the policyholder is unable to return to work.

With advances in medical care more and more people now survive illnesses once thought to be fatal.

Many people will go on to lead a relatively normal life, but they may not enjoy the same mobility or good health that they did.

Often big changes have to be made and this can affect their ability to earn the salary they did before.

Critical Illness Cover provides you with a lump sum or a monthly income, making it easier to cope financially when you need to concentrate on getting well.

Diagnosis of such an illness would be a major trauma in your life, however you would still have to meet your financial commitments. Remember, your life cover won't pay out unless you actually die.

Critical illness cover is offered as a basic or comprehensive policy. The basic plan will cover the main conditions and a comprehensive plan will cover many more which may include loss of sight, permanent disability, loss of hearing and so on.

Most critical illness policies will cover the most common serious illnesses: Heart Attack, Cancer, Stroke, Kidney Failure, Major Organ Transplant, Coronary Artery By-Pass and Permanent Total Disability.

Other illnesses that most policies will also cover include:

AIDS and HIV

Alzheimer's Disease

Benign Brain Tumour

Coma

Creutzfeldt-Jakob Disease (CJD)

Loss of a limb, sight, speech, hearing

Multiple Sclerosis

Paralysis

Parkinson's Disease

Motor Neurone Disease

Free Cover for Children

You will need to check the small print of any policy you take out. Other diseases covered by some insures include, Creutzfeld-Jacob-Disease, HIV resulting from a physical assault, HIV from blood transfusion and pre-senile dementia.

You should read the key features document from the insurance company and their guide to critical illness to find out exactly which diseases are covered

If you contract one of the specified critical illnesses covered by the plan you will need to survive for a period of time before a claim can be made. This is normally for 28-30 days depending on the insurance company. Most plans provide cover for children, normally up to 18 years, subject to certain restrictions.

Once the claim has been approved the plan will normally pay out a tax free lump sum but some plans can pay an income or have the option to pay an income. Most plans will not normally pay out if the reason for the claim is as a result of a criminal act, drug abuse, pregnancy, self inflicted injury or war and civil commotion.

The insurance company will consider a number of factors when deciding to accept the cover applied for. These will usually include:

Your age

Your gender

Amount of cover required

Occupation

Smoker or non smoker Your pastimes

You and your family medical history

Always look carefully at the Key Features Documents and the specific cover on these types of policies.

Bluestone Asset Management is a fee based independent financial adviser firm based in London. We provide free interactive learning modules about finance and money on our main site http://www.bluestoneam.co.uk

The above information is not intended as advice under the Financial Services and Markets Act 2000

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