Critical illness cover is a type of insurance policy that will pay out a sum to the policyholder if they are diagnosed with a specific critical illness. Most insurers will include the following illnesses with a critical policy: cancer, stroke, and heart attack.
Your insurance provider will have specific definitions of each of these policies, and the illnesses that will need to be met in order to be considered ill by their standards. These requirements will need to be met in order to receive your money.
Each provider will have a different list of illnesses that they cover besides cancer, heart attack and stroke (which are covered on every policy). It’s important to know that your life insurance adviser is able to explain these details to you so that you know you are being covered for the right things.
The Association of British Insurers (ABI) has created a list of specific definitions that insurance companies must use as a model for critical illnesses. There are 23 definitions that they use for their ‘Statement of Best Practice’ regarding critical illness cover in the United Kingdom.
Illnesses that are included in this document include loss of speech, paralysis of limbs, a major organ transplant, traumatic head injury, and things like coronary artery by-pass. Some of the illnesses will have specific requirements like “burns to the body”, which “must cover at least 20% of your body’s surface.” One of the other examples is HIV infection. To be considered you need to have caught HIV from a blood transfusion or a physical attack while living in the United Kingdom.
A good way to compare policies with different providers is by reading their Key Features Document and checking which illnesses are covered with which policies. One extra option that a lot of providers include with these policies is Total Permanent Disability as an illness.
A lot of UK residents choose to purchase critical illness cover for their children, which would pay out at around 25% of the policies sum assured. These children’s policies are usually capped at a certain amount though.
Another benefit that is usually included is a ‘waiver of premium’, which can cover payments when you fall ill and can’t work. Adding this onto your policy will often increase the costs though.
Being prepared and informed when buying any life insurance policy is important and especially critical cover. Its good to know about all of the possible exclusions that might be involved for things like dangerous pastimes and sports, drug abuse, alcohol abuse, criminal acts, self injury, and even things like living abroad. The idea is that living abroad may be dangerous to your health.
Most insurance providers will use similar definitions and include their own exclusions if necessary. A typical exclusion would be something like a non-disclosure of a medical detail such as one of the listed illnesses. Before signing the policy and paying your premiums you should make sure that these exclusions do not put you at risk. If they do put you at risk there may be no point in getting an insurance policy. For that reason, you should make sure you speak to a qualified adviser and tell them the truth.
You can usually bundle your insurance products together to save money. So a normal package would include life insurance cover, Permanent Health Insurance, and Critical illness cover. All of these things might not be necessary for your specific needs but a lot of people would rather be safe than sorry.
Learn more about critical illness cover. Stop by Vern Eaton’s site where you can find out all about how to compare critical illness cover prices in the UK.