A critical illness insurance policy provides financial cover and security in the event of a diagnosis of an illness which would prevent you from working.
The policy pays a tax-free lump sum if you are diagnosed with a critical illness, with the funds intended to cover mortgage payments, household bills and living expenses.
Critical illness cover is often available as a combined policy with life insurance.
Why do you need critical illness cover?
Sometimes the road of life takes you on an unexpected turn. The way you cope is what makes the difference, so you need to expect the unexpected and provide protection for you and your family if the worst happens.
A critical illness will change your life, and will majorly impact your family. Having critical illness cover will surround you with a protective financial cushion and will ensure your dependants are financially provided for in the event you cannot work.
Recovering from a critical illness can also require adaptations to your car or home, which comes at a price. A policy can cover these costs as well.
Ultimately, a critical illness insurance policy ensures you can focus on recovery, rather than worrying about money.
How much cover do you need?
You should look over your financial commitments and outgoings, plus how long you wish the policy to last, when choosing the level of cover.
What illnesses are covered?
You need to take a careful look at the list of critical illnesses being covered, as it varies per policy. If you think you are particularly vulnerable to any illnesses, make sure they are included.
Typically, critical illnesses are defined as cancer, strokes and heart attacks. Depending on your policy, you may also be covered for:
- Traumatic head injury
- Organ transplant
- Parkinson’s disease
- Bacterial meningitis
A critical illness insurance policy should pay out the full amount of cover, regardless of the severity of the insured illness.
Critical illnesses and terminal illnesses are classified differently, with a standard life insurance policy sufficient to cover a illness with a life expectancy of less than 12 months.
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