What Is Critical Illness Cover?

Critical Illness cover provides you with financial security against certain illnesses, diseases and medical conditions. A Critical Illness policy pays out a lump sum if you’re diagnosed with a critical illness. This must be as defined within your policy and during the policy term.

How Does Critical Illness Cover Differ From Regular Life Insurance?

With regular life cover, when the policy holder passes away the beneficiaries they have chosen will receive a lump sum payout. Critical Illness is different because it pays out while you are still alive after being diagnosed with a qualifying condition.

How Does Critical Illness Cover Work?

If you are diagnosed with a serious illness it’s likely that your life will change significantly. You may be unable to work and therefore there could face serious financial implications.

A Critical Illness policy will pay a tax-free lump sum if you’re diagnosed with a critical or serious illness that is named in the policy. This payout provides a financial cushion that can be used to cover expenses such as:

  • Medical treatment costs
  • Adaptations to your home if you become disabled
  • General cost of living expenses
  • Paying your mortgage or rent

The payout can, however, be used in any way you wish. Even a once in a lifetime holiday such as a round-the-world cruise.

A Critical Illness policy gives financial protection and peace of mind if you can’t work due to illness or injury. The Critical Illness cover payout will ease any financial impact on you and your family. It will help you to fully focus on recovery and recuperation.

Holding money whilst using a calculator

The policy will usually cease after the payout. If you subsequently pass away, there will not be a further payout.

What Does A Critical Illness Policy Cover?

Exactly what is covered by your Critical Illness insurance depends on the specific details in your policy. Cover varies between providers with some insurers offering protection against more than 50 conditions.

Generally all Critical Illness policies will cover the below conditions, provided they are severe enough:

  • Most types of Cancer
  • Heart Attacks
  • Strokes
  • Multiple Sclerosis (MS)
  • AIDS
  • Kidney Failure
  • Liver Failure
  • Parkinson’s Disease
  • Motor Neurone Disease
  • Benign Brain Tumours
  • Blindness
  • Alzheimer’s Disease

Terms and conditions vary from insurer to insurer in respect of the conditions they will cover, and also the payout amount. It’s important therefore to read your policy documentation so that you know which conditions are (and aren’t) covered.

How Much Will Critical Illness Cover Cost?

Insurers are different and everyone’s circumstances are different and, as such, the cost of Critical Illness cover varies. It depends on a variety of factors including:

  • Your health (Including current general health, body weight and BMI, your family medical history and your own medical history)
  • Your age
  • The amount of cover you take out
  • Any pre-existing medical conditions that you have
  • Your job (you will usually pay higher monthly premiums if you have a high risk occupation)
  • Whether you smoke and how much alcohol you consume

Your Critical Illness policy can usually be adapted to make it more affordable while still providing sufficient cover for your circumstances.

There are also steps you can take to reduce your premium. Positive lifestyle changes such as losing weight and stopping smoking are recognised by insurers and reflected in lower premiums. Reducing the payout amount will also mean a lower premium.

If Critical Illness Cover Is Right For You, When Is The Best Time To Buy Cover?

If you fall ill and are unable to work, Government sick pay benefits may not be sufficient to replace your income. You may also need additional funds to help you cope with your new circumstances, such as making adaptations to your home. You might not have enough savings to cover a period of illness or disability. If you don’t, Critical Illness cover could be a good fit for you.

Certain life events can also mean that the extra security provided by Critical Illness cover would be beneficial. If you get married or have children, Critical Illness cover can help to secure your family’s financial future. Also if you take out a mortgage, Critical Illness cover will help to protect your home if you fall ill.

The best time to take out cover is as soon as possible. As with regular life insurance, the sooner you buy it the more affordable it will be. The older you are when you take out the policy, the higher the premium will be.

Can You Get Critical Illness Cover If You Smoke?

People who smoke face an increased risk of developing a wide range of health issues compared to non-smokers. This means smokers pose a higher risk to insurers as they’re more likely to make a claim. This will be reflected in their Critical Illness premiums as smokers will always pay more than non-smokers.

A young person smoking

For an insurer to class you as a non-smoker, you must have been nicotine-free for at least 12 months. This means not using nicotine patches, nicotine gum or using electronic cigarettes, especially if they contain nicotine, as well as not smoking cigarettes.

Can You Get Critical Illness Cover With A Pre-Existing Medical Condition?

A pre-existing condition is a disease, Illness or injury that you have previously received medical treatment for. It will be more difficult for you to secure Critical Illness cover if you suffer from a pre-existing condition. Some insurers will cover you and some unfortunately won’t.

The premium cost and cover available will depend on what the pre-existing condition is and also how severe it is. It’s likely that you will pay more for Critical Illness cover with a pre-existing condition. It’s also possible that there will be certain exclusions applied to the policy.

The Insurance Surgery are specialists in securing Critical Illness cover for people with pre-existing conditions.

Leave a Reply

Your email address will not be published. Required fields are marked *