Do you need critical illness cover?
Critical illness cover, also known as critical illness insurance, is a long-term insurance policy which covers serious illnesses listed within a policy. If you get one of these illnesses, a critical illness policy will pay out a tax-free, one-off payment. This can help pay for your mortgage, rent, debts, or alterations to your home, such as wheelchair access, should you need it.
What is critical illness cover?
Critical illness insurance will pay out if you get one of the specific medical conditions or injuries listed in the policy.
But be aware that not all conditions are covered and policy will also state how serious the condition must be.
Don’t confuse critical illness cover with life insurance, although they are sometimes sold together.
Every year, 1m workers in the UK unexpectedly find themselves unable to work because of injury or illness, according to the ABI (2015).
Examples of critical illnesses that might be covered include:
Most policies will also consider permanent disabilities as a result of injury or illness.
It only pays out once and then the policy ends.
Some policies will make a smaller payment for less severe conditions, or if one of your children has one of the specified conditions.
What isn’t covered?
Some serious illnesses might not be covered, for example, some cancers and conditions not listed in the policy.
You probably won’t be covered for health problems you knew you had before you took out the insurance, and this type of insurance doesn’t pay out if you die.
What’s covered and what’s not, will be set out in the policy details so make sure you’re fully aware of them and that they cover your needs.
Do you need critical illness cover?
State benefits might not be enough to replace your income if something goes wrong and you can’t work because of long-term sickness or disability.
If you’re eligible, Employment and Support Allowance ranges from around £70 to just over £100 a week, depending on your circumstances and the seriousness of your illness or disability.
You should look at getting critical illness cover if:
Who doesn’t need it?
You might not need it if:
How much does it cost?
Your monthly payments will depend on a number of factors, including:
Other types of insurance you might need
Have you thought about how your dependants might cope financially if you died unexpectedly?
Or what you would do if you fell ill and found yourself unable to work?
There are a number of insurance products which can provide you with peace of mind should something go wrong
For more info please reach out to us.
I am an Independent Financial Advisor with Athena Wealth. I love helping people with their pensions and investments as well as making sure they have adequate protection in place. I have been in the…
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