Frequently Asked Questions for Critical Illness Insurance
What is Critical Illness Insurance?
Critical Illness Insurance (also known as critical illness cover) is a policy that pays out a tax free lump sum of money upon diagnosis of a specified critical illness. Unlike life cover, Critical Illness Insurance pays out to yourself. It is more expensive than life cover, however you are far more likely to suffer a critical illness policy than to die.
Many companies also offer free children's critical illness cover in their policies, to read more about this please read the next section.
What is Children's Critical Illness Cover?
Free Children's Critical Illness Cover is now included with many Critical Illness Plans in the UK. This means that when you take out the cover, a number of your children or potential children are also covered under the policy. Each company's definitions of child cover differs, one example of the cover is from Friends Provident who offer 50% of your total cover or £20,000 (whichever is lower) for each child, with a maximum of 3 children.
It is important to remember that any claims made on the children's cover is not subtracted from your cover and does not mean that your cover needs to stop.
How Much Critical Illness Insurance do I Need?
You can decide how much Critical Illness Insurance you require, or you can contact one of our experienced advisors. It's common for people to cover mortgage's and debts with Critical Illness Insurance, however this is not always possible due to cost.
We recommend that if it's too expensive to cover the full amount of your mortgage/loan then you should consider covering a proportion of the liability or around 2-3 times your annual salary. This way at least you know that you have some additional income which can be used for mortgage payments, bills, specialist medical care or to make adaptations to you home if required.
How Much Will Critical Illness Insurance Cost Me?
Critical Illness Insurance premiums are calculated based on a number of factors including your gender, age, smoker status, medical history, height/weight and the amount/type of cover that you choose.
You can request a quote from our website now by visiting our Online Critical Illness Quote Page, which will give you an initial online quote. Medical background will be taken into considering upon receipt of an application.
What Conditions does Critical Illness Insurance Cover?
The important thing to remember is that Critical Illness Insurance is not a lottery, i.e. 'You are diagnosed as being ill so you are given a lump sum of money'. The policy is meant to provide cover against the financial hardships that can arise from you being seriously ill.
The ABI specify a number of illnesses and definitions that must be covered for a policy to be classed as a Critical Illness Policy. Some companies offer additional definitions and illnesses on top of these for example BUPA who cover around 38 illnesses and automatically include you into their Best Doctor's Scheme and BUPA Health Line Scheme.
What is the Difference between Critical Illness Insurance and Income Protection Insurance?
Critical Illness Insurance provides a tax free lump sum of money upon diagnosis of a specified critical illness. This is not related to your occupation and by default does not provide cover should you be unable to work. One such example is that somebody may suffer from a heart attack or becomes blind/deaf, whilst this would more than likely have a huge impact on their life, it may not stop them from working, in this instance a Critical Illness Policy would pay out.
Income Protection Cover provides a tax free monthly benefit if you are unable to work due to an illness or disability. This is not confined to any specific illnesses and will pay out once you've been off work for a set amount of time.
To have the most comprehensive cover, we recommend that people look into having Life Insurance, Critical Illness Insurance and Income Protection Cover.
Are there any Exclusions for Critical Illness Policies?
Each company differs in its exclusions for Critical Illness payouts. Some common exclusions are drug related claims, self inflicted injuries and claims arisen from war. Some companies may exclude conditions from a policy if you have a pre-existing medical condition, for example it's unlikely that a company would cover you for cancer if you've had cancer before. We advise that you check you key features, policy documents and terms to find out more details about any exclusions.