Critical Illness Cover Insurance for Protection from Serious Illness
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Critical illness cover is an insurance policy that provides financial support if you are diagnosed with a serious medical condition. It offers a tax-free lump sum payment that can help you and your family cope with the financial impact of your illness. This article will explore what critical illness cover is, how it works, who benefits from it, what diseases and conditions are covered and how much it costs.
REAL LIFE CASE STUDY
At aged 30 Carl* decided to go on a trek with his mates. Before they went he talked all of his friends into going for a full health check. At his own medical he learned that he had cancer. He received treatment straight away. His critical illness cover paid off his mortgage allowing him to concentrate on getting back to full health. After two years he returned to work. As Carl no longer has a mortgage to pay he has re-directed his salary into a Pension fund that he couldn’t afford before.
Carl’s wife has now taken out Income Protection. As when Carl was ill, he was off work and didn’t have a regular income coming in. His wife doesn’t want to run that risk should she fall ill.
Links to other types of protection policies:
What is Critical Illness Cover?
Critical illness cover is an insurance policy that pays out a lump sum of money if you are diagnosed with a serious medical condition. This can include cancer, heart attack, stroke, and other life-threatening illnesses. The amount of money paid out depends on the severity of your condition, if you are unable to work again and the terms of your policy.
How Does Critical Illness Insurance Work?
When you take out critical illness cover, you pay a monthly premium to the insurance company. If you are diagnosed with a specified critical illness during your policy term and are unable to work due to your medical condition, you will receive a tax-free lump sum payment. This insurance payment can be used to cover medical expenses, pay off debts or your mortgage, or provide financial support for your family.
Who Benefits from Critical Illness Cover?
Anyone who wants to protect themselves and their loved ones from the financial impact of a serious medical condition can benefit from critical illness protection. It is particularly important for those who have dependents or who may struggle to meet their financial obligations if they become ill.
Benefits of Having a Critical Illness Policy
Having a protection policy in place provides peace of mind knowing that you and your family will be financially supported in case of an unexpected diagnosis. It can also help alleviate stress during an already difficult time by removing some financial worries.
Diseases and Conditions Covered
The range of illnesses, diseases and conditions covered by critical illness policies for UK residents varies between providers. However, most policies typically cover cancer, heart attack, stroke, multiple sclerosis (MS), kidney failure, major organ transplant, Parkinson's disease, Alzheimer's disease or dementia.
When it comes to medical conditions, some are more serious than others. Serious medical conditions can significantly impact a person's life and require ongoing treatment and care. Here are some examples of serious medical conditions that are typically covered:
Cancer (including leukemia)
Cancer is a group of diseases characterized by the uncontrolled growth and spread of abnormal cells in the body. It can affect any part of the body and can be life-threatening if not treated promptly.
Heart Disease (heart attack or stroke)
Heart disease refers to a range of conditions that affect the heart, including coronary artery disease, heart failure, and arrhythmias. It is one of the leading causes of death worldwide.
Diabetes
Diabetes is a chronic condition that affects how your body processes blood sugar (glucose). Left untreated can lead to severe complications such as blindness, kidney failure, and nerve damage.
Mental Illness
Mental illness encompasses many conditions that affect mood, thinking, and behaviour. Examples include depression, anxiety disorders, bipolar disorder, and schizophrenia.
What's Not Covered by Critical Illness Insurance Protection
While a protection policy can provide financial support if you are diagnosed with a serious medical condition, it's important to understand that some conditions may be excluded from your policy. Here are some examples of what is typically not covered:
Pre-Existing Conditions
Most policies exclude pre-existing medical conditions from coverage. This means that it may not be covered if you have a medical condition when you take out the policy.
That is often why it is a good idea to take a policy when you are younger when the insurance is cheaper and you are less likely to have a medical history.
Self-Inflicted Injuries
Your illness or injury may not be covered under your policy if it is self-inflicted.
Drug and Alcohol Abuse
If your illness or injury results from drug or alcohol abuse, your policy may not cover it.
Non-Specified Illnesses
Critical illness policies cover not all illnesses or medical conditions. It's essential to read the terms and conditions of your policy carefully to understand which specific illnesses are covered.
Short-Term Illnesses
Critical illness cover is designed to provide financial support for long-term serious illnesses. It does not usually cover short-term illnesses or injuries.
It's essential to review the terms and conditions of any insurance policy before taking it out so that you fully understand what is and isn't covered. If you have any questions about what is included in a policy, speak with a financial adviser or insurance provider for guidance.
When Does Critical Illness Cover Pay Out Your Lump Sum?
A critical illness insurance policy pays out if you're diagnosed with an illness specified in your policy documents. The payout is usually made as soon as possible after diagnosis so you can use the money immediately. When you make a claim, the size of the payout after you make a claim will depend on the amount of cover agreed upon between you and your financial advisor.
It's a good idea to ensure that your policy is up to date and keep up with your monthly payments to ensure a successful claim and you get a payout. Future claims will be refused if you cancel your policy, forget to pay the insurance premiums, the policy ends or the condition is deemed less severe.
Critical illness policies provides essential protection for anyone concerned about the potential financial impact of being diagnosed with a serious medical condition.
By understanding how it works and what it covers, individuals can make informed decisions about whether this type of insurance is right for them.
Understanding the Premium Costs when you Buy Critical Illness Insurance
The monthly cost of your policy will depend on the type of cover and how much financial protection you require to provide for your family and cover your debts.
Average Cost of Critical Illness Cover
Premium costs vary depending on several factors, including your age, health status, and the amount of cover you need.
To give you an idea of how much you might pay for critical illness cover in 2023, here are some average costs based on age ranges:
- age 18-29 : £8.00 - £20.00 per month
- age 30-39 : £12.00 - £32.00 per month
- age 40-49 : £19.00 - £51.00 per month
- age 50-59 : £28.00 - £75.00 per month
It's important to note that these are just averages for a guide, and your actual cost may be higher or lower depending on your individual circumstances.
For example, providing a cover amount totalling £100,000 for a healthy 30-year-old with no pre-existing medical conditions and who is a non-smoker would cost around £20.00 per month.
Factors That Affect the Cost of Critical Illness Cover
Several factors can influence how much you'll pay for your insurance cover:
Age
Generally speaking, the younger you are when you take out a policy, the cheaper it will be.
Health Status
Your overall health and any pre-existing conditions can impact your premium and extra cost.
Lifestyle Factors
If you smoke or have a high-risk occupation or hobby, this could increase your premium.
What your cover covers for
How much cover do you need? The greater the financial protection you require on payout, the higher your premium will be.
While this type of insurance can provide valuable financial protection if you're diagnosed with a serious illness, the cost varies depending on several factors. And it is generally more affordable when purchased at a younger age with good health status.
Types of Critical Illness Insurance
There are many types of cover available. Each has its benefits and drawbacks. These are the most popular types.
Comprehensive Cover
A comprehensive critical illness policy is the best type of policy. This policy covers many conditions and illnesses, including stroke, cancer, heart attack, stroke and other serious diseases. Although it offers greater coverage, this policy can have higher payouts and be more costly.
Standard Policies
Standard cover is more affordable and covers fewer conditions and illnesses than comprehensive insurance. This covers the most common conditions, such as stroke, heart attack, cancer and heart attacks.
Enhanced Cover to Ensure Additional Illnesses Are Covered
You can add additional conditions to your policy to provide cover for an additional premium. This is useful if you have a family history or want to be sure you are covered for a specific condition.
Children's Critical Illness
Children's critical illness coverage provides protection for your child in the event of a serious illness. This policy will pay for the medical costs and other expenses associated with caring for ill children.
Are you looking to Buy a Protection Policy in Newcastle?
When choosing a protection policy, it is important to consider all options. Consider what conditions and illnesses you would like to be covered for, the cost of premiums you are willing to pay, and whether additional features are necessary.
Now you understand the benefits of a Critical Illness policy, would it not be worthwhile considering other ways that you could potentially protect your current quality of life for yourself and your loved ones.
If you want to get a quote for an insurance policy or have a chat to find out how it works, why not get in touch today?
Testimonial
“When I became seriously ill I realised how important Penda’s protection advice had been. Now my wife has the finances to cope and I don’t have that to worry about.” Mr Surtees, Alnwick
Get a Quote and Take Out Critical Illness Insurance
We can provide you with professional advice designed to cover your specific requirements and recommend the insurers who provide the best insurance cover.
Quite often life cover can be incorporated into the quote so that critical illness cover and your life insurance policy can be provided by one insurer. Get in touch to learn more.
