What is Critical Illness Cover?
Critical illness cover pays out a ‘tax-free’ lump-sum of money in the unfortunate event of you being diagnosed with a serious illness.
The policy is designed to provide financial security at a time when you are unlikely to be able to work and rehabilitation and getting back to full health – not worrying about how you are going to pay the bills – should be your primary concern.
These funds not only provide financial security but can be used for treatments not available on the NHS or even in the UK and can also be used to adapt your home in the event of a life-changing disability.
What Critical Illnesses are covered?
The ‘big three’ conditions are cancer, heart attack and stroke; however, critical illness providers have to cover all illnesses laid out by Association of British Insurers (ABI). In order to secure the lump-sum pay out and a successful claim, the serious illness must meet the provider’s definition which is governed by ABI as the minimum viable definition for each illness.
Each provider varies in their level of cover so it is important to consider a few different options before making a decision. Some providers go above and beyond the minimum definition and some will provide cover for up to 50-60 different serious illnesses or disabilities.
What is Terminal Illness cover?
Terminal illness is different from critical illness. A terminal illness is an illness or condition that cannot be cured and usually leads to death within a period of time. In normal circumstances, providers will pay out a policy on life cover in the event of you being given 12-18 months to live. Critical illness policies don’t tend to cover terminal illness as standard, so critical illness and life cover are often combined to ensure both illness and death are covered under one plan.
Am I able to obtain Critical Illness cover after suffering an illness?
As part of the process in obtaining cover, providers will ask you to complete a medical questionnaire and underwriting. Any previous conditions you’ve had may impact your ability to obtain cover on standard terms but they won’t necessarily preclude you from obtaining cover again in the future.
How do I calculate how much cover I need?
A Home Group Advisor will be able to recommend a suitable amount of cover based on your needs and requirements.
Generally, critical illness is assessed on how much cover you would need to replace lost income through not being able to work and feel financially stable in the event of a serious illness. You may also want to ensure your mortgage is cleared so you have an asset you own outright that can be adapted for a disability as well as providing financial stability.
What is Waiver of Premium?
In the event of you being unable to work due to accident, injury or illness, you may struggle to keep up your repayments on your policy and therefore compromise your cover. Waiver of premium ‘waives’ any premiums during the period you are unable to work to ensure you are still covered.
What are guaranteed premiums?
These are premiums that will not change during the term of the policy regardless of interest or cost of living increases.
