Critical Illness

The thought of becoming ill is an unpleasant one, but it’s important to consider when planning for the future. If you suffer a critical illness and survive, will your family still be able to afford the cost of living?

In addition, you want to feel free to have as much time as you need to recover from your illness, which is often not the case with the financial pressures that loss of income can bring.

Critical illness cover is a type of insurance policy that pays out a tax-free lump sum in the event that you are diagnosed with a specific illness or medical condition during the term of the policy. Factors that will affect the cost of critical illness cover will include the sum insured, your age and medical history.

Specific conditions for Critical Illness Cover

The definition of critical illness, and the conditions covered, will vary greatly depending on the policy. It’s important to understand exactly what a policy covers, as some may not offer a pay-out unless the illness is particularly severe or results in permanent symptoms.

However, not all diagnoses will be included. For example, some policies will not include certain types of cancer as they are considered to be easily treatable. An independent financial adviser can explore all of your options for you, searching the whole of the market to find the policy that’s right for your specific needs and requirements.

Total and Permanent Disability (TPD)

This is an optional benefit provided by some critical illness policies and covers any condition which results in total and permanent disability, even if the condition is not specified elsewhere in the policy. The definition of disability may depend on your occupation and could include any injury or diagnosis that prevents you from carrying out your work permanently. Your adviser can help to explain this further.

Combining Critical Illness Cover and Life Insurance

Critical illness cover is likely to be cheaper if It’s purchased alongside life insurance. The important thing to consider here is that, with some policies, there will only be one pay-out, so if you claim for a critical illness, there will not be another pay-out on death.

If you are unsure about the type of cover you should take out, your adviser can guide you through the process, and help find the right cover options for you.