Critical illness insurance is a type of policy that pays out a lump sum if the policyholder is diagnosed with one of the specified serious illnesses or life-threatening conditions listed in the policy.
Critical illness insurance is a type of policy that pays out a lump sum if the policyholder is diagnosed with one of the specified serious illnesses or life-threatening conditions listed in the policy. These can include cancer, heart attack, stroke and multiple sclerosis.
The amount paid out varies depending on your provider and how much cover you take out. The payout amount is designed to either pay off your mortgage while you get treatment or replace your income so you’re not financially stressed during recovery.
Critical illness policies can be bought alone or as an add-on to your life insurance policy.
Critical illness policies can be bought alone or as an add-on to your life insurance policy. You can purchase a critical illness cover, which will pay out if you develop a serious medical condition that leaves you unable to work, as a standalone policy. It’s also available as part of a life insurance policy as a rider.
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Who needs critical illness cover?
If you have children, a partner or other dependents who would struggle to get by without your income, then it’s worth thinking about whether you should consider getting critical illness cover.
You may also want to consider taking out this kind of cover if you already have an existing health condition or a family history of serious illnesses. If either of these things apply to you, then the chances are that your insurance premiums will be a little higher.
Regardless of how healthy and active you are at the moment, it’s always possible that something could happen in the future which would make it difficult for you to work and bring home an income.
This means that even if there’s no obvious reason why you might ever need to claim on your policy, critical illness insurance can still offer peace of mind and protection for your loved ones in case the worst does ever happen.
Are there different definitions for each condition?
If you answered yes to any of these questions, then this article is for you.
There are a lot of different definitions in critical illness policies, and those definitions can vary significantly between policies. Some are very specific (for example you may have to meet a list of specific symptoms before the policy will pay out), while others are more general. Some policies only have a few conditions; some have many. As we’ve seen, the definitions can be very similar between different policies – but it’s important that you know exactly what definitions your policy has so that you’re fully aware of whether or not you fall under them before purchasing.
What are standard critical illness policies?
Standard critical illness policies are the most common form of cover, and pay out a lump sum if you are diagnosed with one of the specified serious illnesses or life-threatening conditions listed in the policy.
The diagnosis must be made by a doctor or specialist in order for a claim to be made.
A standard critical illness policy is more comprehensive than other types of cover and usually provides protection against more serious conditions like cancer, heart attacks and strokes.
What type of illnesses are included in standard critical illness policies?
You might want to consider a critical insurance cover if you have any of the following conditions:
- Cancer
- Heart attack
- Stroke
- Coronary artery bypass
- Parkinson’s disease
- Multiple sclerosis
- Blindness or deafness (caused by illness, not an accident)
- Major organ transplant
- Alzheimer’s disease
- Heart valve replacement
- Benign brain tumour
What other types of critical illness policies are available?
Outside of stand-alone critical illness cover, there are a few other types of policies that you can take out which also provides critical illness cover. These include:
- Accelerated critical illness
- Family critical illness
- Joint critical illness
- Children’s critical illness
- Over 50s critical illness
Can critical illness cover be tailored?
Yes, policies can be tailored to suit your needs, but it’s important to remember that the more you tailor a policy, the more expensive it will become. You could, for example:
- Add extra conditions that you want cover for.
- Change the amount payable from a lump sum to monthly payments.
- Increase your level of cover in line with inflation so that it keeps up with the cost of living.
If you have children under 18 years old who are not yet covered on their own critical illness policy or life assurance plan, they can be included as an additional benefit on your plan at no extra cost.
If a claim was made on a critical illness policy, would it affect future insurance products?
“There are lots of different policies available – so you need to make sure your policy suits your needs. You can’t get critical illness cover for a condition you already suffer from or which is hereditary/genetic, although people can still buy life insurance if they have a pre-existing condition.
If a claim was made on a critical illness policy, would it affect future insurance products?
No – this is just like any other type of insurance and wouldn’t have any impact on the cost of future premiums. However if someone has received a critical illness payout it may be more difficult for them to get specialist cover for that specific condition in the future – but not impossible. At Beagle Street, we don’t ask about health problems when you’re buying life insurance with us!
you need to know the facts before undertaking any kind of financial planning
Investing in insurance is a significant financial decision, therefore it’s important to do your research before making any kind of investment.
Asking the right questions will ensure you get all the information you need to make an informed decision. For example, what are the benefits and risks associated with your chosen investment? How will changes in tax laws affect your investment? What can you do if you change your mind about a certain product?
It’s always advisable to think of all possible scenarios that may impact your financial plan. You don’t want to be caught out if for instance a loved one passes away or becomes critically ill and won’t be able to work. In order to protect yourself from these unlikely but possible situations, planning ahead is crucial.
Before even considering investing in life insurance it’s highly recommended that you first organise all of your finances into order and build an emergency fund. If necessary save as much as possible until this account has around three months worth of living expenses saved up.