Critical Illness

Critical illness insurance is a long-term insurance policy where you'll get a tax-free 'lump sum' - a one-off payment - if you're diagnosed with one of the serious illnesses covered by your insurance policy. It's designed to pay off your mortgage, debts, or help pay for alterations to the home

 

What does critical illness insurance cover?

You critical illness insurance will pay out if you get one of the specific critical illnessed or injuries listed on the policy. Not all conditions are covered. The policy will also specify how serious the condition must be. Examples of critical illnesses are:

  • heart attack
  • stroke
  • certain types and stages of cancer
  • Blindness

Some policies will have an option for permanent disablement.

 

What is not covered by critical illness insurance?

Different Policies cover differing numbers and types of illness at Constant we can advise on the differences of the various covers.

Some serious illnesses might not be covered by a critical illness policy. For example, some cancers and 'chronic' or long-lasting conditions that could mean you can't work might not be covered.

Existing Health problems before you took out the insurance are also very unlikely to be covered.

Unless you have a combined life insurance with critical illness policy this type of insurance does not pay out if you die.

 

When might you need critical illness cover?

The money you get from a critical illness policy can be used to pay off a mortgage, to pay medical bills, home modifications or for anything else.

Critical illness insurance could be a good choice for you if:

  • you don't have savings
  • you don't have a good employee benefits package to cover a period of time off work due to sickness

 

How likely are you to make a claim?

Insurance is based on risk.

If you are young, fit, well, with a good family medical history and a healthy lifestyle, your chances of getting an illness severe enough to be covered by one of these policies might be fairly low. The older you are, the more chance you have of getting ill - but to reflect this, the premiums are higher and any pre-existing medical conditions won't be covered.

 

Who doesn't need critical illness insurance?

You probably don't need critical illness cover if:

  • you have enough savings to fall back on, or have some other way to pay off your mortgage, for example, if you couldn't work

 

Is critical illness insurance good value for money?

Critical illness cover will only pay out if you are diagnosed with one of the illnesses specified in the policy. It will not cover you if you can't work due to any other illness and this is more likely to happen.

This type of insurance is more expensive than life cover and can be expensive over the long term. Before you buy you need to be sure you can keep up the payments over the long term.

However hindsight is a wonderful thing and anyone who is diagnosed with a critical illness would wish they had this cover.