Critical Illness

Critical Illness pays out a lump sum if you are diagnosed as having a range of serious or life threatening conditions. These include cancer, heart attack, kidney failure, stroke and multiple sclerosis, among many others.

Some insurers offer up to a total of 30 conditions, including permanent and total disability, coronary and artery bypass grafts, Alzheimer’s and Parkinson’s diseases.

Do I need it?

In the past, diagnosis of a critical illness was virtually a death sentence. Now, many previously untreatable conditions are treatable and curable. Overall, you are now more likely to live than to die if you suffer a critical illness.

A cash lump sum cannot make you better, but it can avoid you having to worry about money at a time when all your energy should be concentrated on getting better.

Buying Critical Illness Insurance

When buying critical illness insurance there are three things to decide:

• How much cover to have.
• What conditions you want covered.
• How long you want the policy to last and whether it should be part of another life assurance policy or ‘standalone’.

How much cover you have is often determined by what you can afford, as critical illness insurance costs more for each pound of sum assured than life assurance (because you are about 2.5 times more likely to have a critical illness than to die before age 65). Most people want to at least be able to pay off their mortgage and any other loans, then you should add on what you can afford.

In terms of conditions covered the choice is to have basic cover (about five or six conditions) or comprehensive – the full number that the insurer offers. You will pay a bit more for comprehensive cover but even basic cover should cover at least 80 per cent of likely critical illnesses.

You can buy critical illness on either a term assurance or Whole of Life basis, and consultations about appropriate sums assured should be addressed to our advisory team.

Making a claim

To claim you will need to prove that you meet the criteria laid down in the policy conditions. Usually this involves contacting the insurer first and completing a claim form. They will obtain the necessary medical evidence, usually from your specialist. If you have a standalone plan, you may have to prove that you are still alive 14-30 days after being diagnosed. If you die after that and before the claim is paid, your estate would get the benefit.

Download the attached Key Guide ‘Financial protection – for you and your family’ for full details on insurance options.