Serious illness can strike at any age and therefore some people opt to take out a form of insurance which is designed to ease financial strain through a tax-free lump sum payout, particularly by those who have close relatives who rely on them for financial input, often referred to as ‘dependants’ in policy language.  This is often called critical illness insurance or critical illness cover.

This cover pays out the agreed sum when the policyholder is diagnosed with a specified range of illness.  There will typically be quite a long list of illnesses covered on the policy, but the wording of a company’s deal may differ from one firm to the next.

Nearly all critical illness insurance policies cover a set of core conditions, often things like cancer, a heart attack, kidney failure, and a stroke.  Most will also pay out if somebody becomes permanently incapacitated because of an injury or illness.

However, not all conditions are covered and a potential policyholder may want to carefully examine the wording of a deal before they sign on the dotted line.

Generally speaking you can get illness cover either for a set amount of time, perhaps as long as a mortgage is due to last, or for the rest of your life.  Somebody can take out a policy with an agreed term and perhaps renew when runs out if they choose.

There is also often a waiting period after you make a successful claim, perhaps around a month, before a payout arrives and after a policy is purchased somebody will need to wait a set amount of time, perhaps three months, before they are allowed to make a claim.

Getting critical illness cover insurance often involves completing a form provided by the insurance company.  This will often enquire as to your medical history and the background of close family relatives in terms of medical conditions.  You may have to pay a higher premium if some of your relatives have suffered certain major illnesses.

Smokers can also often expect to pay more, and sometimes you may need to complete a medical.  There are also some common exceptions on this kind of cover, and insurers will not typically pay out if someone falls ill due to drug or alcohol abuse, self inflicted injury or HIV/Aids.

Following a successful claim the agreed benefit is simply paid as a one-off lump sum and you can often expect it to arrive fairly quickly after the serious illness has been diagnosed.  Critical illness protection is also different to permanent health insurance which involves a regular income payout if somebody is diagnosed with a long-term illness or injury.

Importantly critical illness insurance typically allows you to use the payout exactly as you wish.  You may want to use it to pay off a mortgage or to clear debts, and it can also be used for things like childcare or even the household shopping and bills.  The idea is to help a family come to terms with the policy holder’s condition and support them financially at a difficult time.

When you are young fit and healthy, it is awkward to plan for the day when that might not be, but critical illness insurance is something that we all should make provision for.  This is a case of providing the essentials of living in today’s world for your loved ones in the event of your early death.

After many years of medical studies it is plain the chances of a individual contracting a critical illness during their life is quite high therefore insurance providers now handle insurance policies like this every day.

Studies have highlighted the problem with virtually one man in five by the time they retire having a serious medical illness.  For women, this figure is slightly lower with only one in six being affected by before retirement.

Of course, most individuals do not really feel they need critical illness insurance and would explain why they are so unwilling to start a plan.  This type of insurance policy is designed to protect those around you who you love but the primary reason why individuals organise critical illness cover is to ensure mortgage repayments do not lapse.

Nowadays increasing numbers of people decide to use the World Wide Web to arrange their insurance plans and more recently cover for critical illness has also become available.  For obvious reasons there will be certain things that need physical evidence and so these plans are not invariably smooth sailing to organize.

Understandably, insurance suppliers want to see physical proof that the applier does not have any outstanding conditions before they arrange the coverage.  This is also for the benefit of the claimant because if they need to contact their critical illness insurance provider, they do not want to receive an insensitive person on the other end of the phone line.

One group of high risk individuals are those that smoke, in fact they generally ask each applicant if they have smoked within the previous year and if the answer is ‘yes’, they will be rated higher.

Many things are taken into account when dealing with the risk component associated with any type of insurance policy including the applier’s age, their overall health, whether the type of work they do is dangerous or any activities they participate in, not just whether they are a smoker.

The cover that critical illness cover insurance provides is quite extensive, and so you can anticipate it to pay out if you have a deadly illness, if you are laid off from work owing to the condition or if surgery is required.  Family responsibilities are never easy but ensuring your family is looked after if you are diagnosed with a deadly illness does not have to price the earth.

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The price you pay will depend on a number of things, age being one thing they use to figure your costs. Some employers will offer critical illness cover with their insurance programs.

The critical illnesses that will be covered in your plan will be chosen when you apply for your insurance policy and you will choose how many years the coverage is for.

Some types of illness covers are:

• life cover with critical illness option
• life cover with children’s critical illness option
• life and critical illness cover combined
• life cover with disability option
• income protection with critical illness option or death

Life cover with critical illness option

This is like a life insurance policy that gives you the option to change or add critical illness into it later.  The life insurance is paid in the event of your death to your beneficiaries.  Most policies are fixed term policies.

You will choose how many years the policy goes for and the amount that will be paid in the event of any situation in which the policy is for.

Life cover with children’s critical illness option

This is similar to one for an adult but is for children. Most companies will have an age bracket for the child or children to be insured.

Life and critical illness cover combined

This can cover one individual or a couple. If one gets ill or dies, the policy will cover either one, as both will be listed on this policy. This insurance will be for life insurance and critical illness insurance.

Life cover with disability option

This is an insurance that is for critical illness coverage if you become ill. It will also cover you if you cannot work due to the illness or become disabled.

Usually this insurance only pays you between fifty to sixty five percent of what you earned and it can take anywhere from 5 weeks to 52 weeks before you begin to receive benefits.

It is a great idea to have some savings for the future to fall back on in case there is a time when you may need some income.

Income cover with a disability option or death

This is pretty much the same as having disability insurance. The policies and the guidelines are basically the same. Income protection will pay you a percentage of your income if you are unable to work due to a critical illness, paying approximately fifty to sixty percent of what your earnings were.

These benefits are tax free for personal individuals. For business owners or the self employed, the guidelines are a bit different. The company that you choose for this insurance will be able to explain everything to you when you apply for income cover with the disability option. You will choose the amount of years this plan covers just the same as life insurance cover.

The Average Cost Of Critical Illness Cover Insurance

There are several companies to choose form in the UK for critical illness cover. There is Prudential, Aviva, www.lifeassurance.com and many more. Most companies will have a place on their site for a free quote.

They should give you a quote from several different companies and they should find you the lowest prices. Once you receive quotes, it is a good idea to meet with the companies in person. This way you know they are legit companies.

The prices are all about the same with each company. The average cost of critical illness cover is about £50 per month. These prices could be a little more or less, depending on what your age is, family history, and other questions you may be asked when applying for insurance plans.

Some companies will ask you to get a physical. Receiving benefits may depend on the results of the physical.

Someone can get an insurance (assurance) plan to cover any event that may occur, whether it is an illness, or death, the family and yourself are covered. Some things are not covered with any of these plans.

Each insurance company is a bit different and will tell you what is not covered. An example of something that is not covered in these plans is alcohol or drug abuse.

My Personal Opinions

When I think about the costs to have this insurance, I may think the prices are a bit high, but when I think about it further, it is kind of like having a savings account. I cannot take any money out of this savings account though.

This money that I pay will go toward any event that may occur during my lifetime. It will protect me if I am working and come down with a critical illness. It will protect me if I become disabled. Other types of policies will cover children, family, mortgages or whatever plan is chosen.

Sometimes, it can be very frustrating to have to wait for benefits. After all, we pay these companies for many years for this critical illness insurance, but they do tell us ahead of time what to expect if an illness happens to us or our child.

If you can put away an extra ten to twenty quid each week while you work, it will add up and you will have some money just in case. This way you have two savings set aside for you and your family.

This I think, is a great feeling to know that no matter what may happen in life, we are okay. Our family will be okay, too. No one likes to think of the possibilities that someone may get sick or die, but it can be a reality, so it is so much better to be prepared than to have it happen and not have anything to fall back on.

The old saying goes, prepare for the worst and hope for the best. There are other cover plans one can get. Someone can get a cover plan to take care of the mortgage in the event of their death. You will choose which critical illnesses the plan will cover when you apply for the insurance.

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The Advantages of critical illness cover insurance

For anyone who has been in the hospital with a diagnosis that can significantly alter their lifestyle and potentially be life threatening, the stress of financial burdens should be the last thing on your mind.  However, this is usually not the case.

Consider for a moment that all your medical bills are taken care of by your health insurance, there are still financial strains that most people do not consider.  Like if you are having in home help if you are not able to care for yourself after your diagnosis.

Or if you are being forced to give up your job due to your illness and the immediate financial strain that comes with being out of work, even for an extended period of time.  There is also often a lag time with any short term disability pay that your company may provide or any pensions you may receive from the government.

This lag time often allows bills to pile up and if you are paying a portion of your medical costs this can leave little savings for anything else.  The financial strain that a lifetime diagnosis usually comes with is reason enough for anyone at high risk for these diseases to consider critical illness cover.

Financial burdens are not the only reason to consider critical illness cover, but the peace of mind that comes with that can be invaluable during a period of illness.  The stress that comes with financial pressures can actually hinder the recovery of a person diagnosed with a life altering illness.  The burden this stress causes on the family and the patient is overwhelming and can only add to the difficult nature of the illness.

Also, you may have to compromise the treatment that you want for your loved one.  Second opinions and experimental treatments are often not covered by traditional medical insurance.  Life saving technologies that are experimental could be the answer to your medical recovery but not being able to afford such treatments is a reality many people have to face.

Finally, each specific company may offer advantages for signing up for critical illness cover.  Often times you can set the length of time and the amount you pay, resulting in you building a policy that is specific for you.

Many companies extend the cover to include your children in your coverage.  For any parent, this not only ensures that their family’s lifestyle is not compromised with the diagnosis of a sick child; it also may allow them to take a leave of absence from their job to be with their child during their medical illness.  Also, many companies offer discounts when you bundle life insurance and critical illness cover together.

For anyone who has a family history of these specific illnesses or is at high risk due to environmental factors this type of coverage can give you peace of mind that if a medical emergency were to happen there would be coverage for all the unpredictable things that you cannot plan for.

This money is also paid out in one lump sum so waiting for settlements is not something that you would have to worry about if the need should arise.

The Disadvantages of critical illness cover insurance

While we have discussed some excellent reasons to consider critical illness cover there are also some overwhelming disadvantages to this type of insurance.

The first is that it is very limiting and very specific to the types of illness that they cover.  The Association of British Insurer’s and the medical profession determine the validity of the illness and whether it is covered under the critical illness cover.

Some of the diseases listed are very specific, for example blindness or deafness that is permanent.  However, some of the diseases listed are very vague including cancer.

When cancer is listed, there is fine print that claims that less advanced cases of cancer are not covered.  This becomes a question of who determines what is an advanced case and what is a less advanced case.  Usually, the insurance company has their own doctor at a UK hospital that makes the determination.

So while your doctor may give you a diagnosis that is fairly advanced their medical specialist may determine you are only mildly advanced and negate your case all together.

For most of the diseases listed, there is fine print on what is included and excluded.  This makes it very difficult to determine for people with a strong family history to pinpoint whether their specific case would be covered.

Another shortcoming of these types of policies is the room that is left for medical advancement.  If you are locked into a 20 year policy and medical advancements make your disease less serious this could affect yourself if you are covered under your insurance policy.

Also what advancements have to be made are not listed.  So there is a huge gray area in your policy left for medical advancement and who determines what types of advancements have to be made in order for your cover to be obsolete.

These policies while very flexible in the amount of coverage and the length of time for which you have the coverage, are not flexible in when the coverage stops.  Most have cut off age limits for which your coverage ends, usually around the age of 65.

This means you may pay into a policy for the majority of your life and with the advancement of age when disease become more prevalent you may lose coverage.  So while offering peace of mind for awhile there is an expiration date as to when you can become sick and still keep your critical illness cover policy.

For most people the decision to take on a critical illness cover quote will be a very personal choice.  They may look at things like advancing age, family history or personal experience.  For anyone who has lost a loved one to these types of illness and seen the stress and hardships that can follow this choice may end up being more of an emotional one than a practical one.

Anyone considering this type of coverage should talk to their doctor about their risks for these potential diseases and also their insurance provider to determine the right coverage for them.  They also will want to read any fine print before purchasing this type of policy to make sure they are receiving the best insurance for their money, and that their specific illness is covered.

It is also important to remember that cheap critical illness cover may not be the best type of cover, sometimes the higher premium is the better option.

For those who are just looking to have peace of mind and are not at immediate risk they may want to weigh all their options before jumping in to a policy.  For those at a high risk level, this may be the type of critical illness cover insurance that allows them the freedom to live without worry.

Whatever categories you fall into make sure that you choose a reputable company that is sure to outlive you and your policy.

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The peace of mind experienced by knowing, in case of the unexpected you have at minimum, prepared you and your family financially.  Alleviating the stress that comes from overwhelming medical bills is half the battle of getting back to health.  The burden of living without you is partially eased in case of fatal disaster.

However, before you run off to purchase life and/or critical illness cover it’s important to know just what these two programs offer, how they differ and what package will best suit you and your families needs.

Let’s start by looking at Life Insurance cover first.

Historically, Life cover has been around since the period of the Roman Empire.  Termed “burial clubs”, this antiquated form of Life cover would supplement the cost of the deceased funeral expenses and provide some monetary assistance to the survivors family.

A more modern version was introduced in the 1600’sby a the now famous Lloyds of London Company, but was more specifically designed to service the shipping and trading industry with it’s many related risks.

Though policies have become a bit more complicated today, Life cover has spanned the globe and has become an important addition to every civilized society.

What exactly is Life cover?

In its purest definition – Life Insurance cover is a legal contractual agreement made between Insurer and a Policy owner.  The Insurer agrees to pay according to the agreed upon terms a lump sum (benefit) to the policy holders designated parties (beneficiaries) at the time of his death in exchange for the Policy owner paying the required monetary amount (premium) determined at time of entering contract.  These premium payments are usually set to be paid monthly, some policies will allow a lump sum payment.

Here is where death insurance can become complicated and it is vital to take some time to identify the differences in the various forms of cover before investing in protection.

Listed below are the differing options with a brief description to give you any idea of how these options will affect you as a potential Life cover holder.  Please note due to lack of space we will not be including investment and annuity type policies in this article.

Temporary Term Life cover Insurance – Life cover for a specific length of years.  The premium may vary over time increasing or decreasing.  The terms of this life cover plan can be a minimum of one year (which may be renewed annually) with premium buying protection only in the case of death.  If the policy owner dies before the term has expired, payment will be made.  If she outlives the policy, no money is paid out to the beneficiary or policy holder.

Permanent Life cover Insurance – Policy remains active up to the time of death of policy holder.  The cancelling of this policy cannot be initiated by the Insurer other than in the case of application fraud.  Policy holder will have money management options as the policy builds over time.

Whole Life cover Insurance – This policy contracts a fixed premium price with a fixed and guaranteed death benefit.  This plan also allows for additional terms ( riders) to increase cover or provide greater monetary amounts to beneficiaries.  Also “loans” may be granted but will decrease the benefits given to the designated survivors.

Universal Life cover Insurance – This is the newest option and is a form of investment life cover.  Combining a cash account with the premium payments and related interest will be applied to these sums in order to increase the beneficiaries payout.

Limited Pay Life cover Insurance – this policy provides for a limited number of premium payments.  Once the contracted period of payment is met, between any variation of time starting at a minimum of 10 years or up to the age of 65, that policy has been paid for and no further premium payments are required.

Endowment Life cover Insurance – This is basically a savings plan.  The accumulated amount this plan the exact amount of the payment received once the policy owner reaches a certain age.  His being dead or alive is not a condition to distribution of the contracted amount (endowment).

Accidental Death Life cover Insurance – This policy is a limited life cover plan that will only cover death by accident which most often does not include suicide or health problems.

Keep in mind all of the above optional policies can include riders (policy add on), specific terms of contract, and confusing terminology that could disqualify a policy holder from receiving the expected benefits.  Be sure to read thoroughly through your policy before signing.

Taking a look at Critical Illness Cover Insurance

In 1983 a South African cardiac surgeon, Dr.  Marius Barnard presented a plan to the insurance world that would protect an individual’s life rather that providing for his death.  Today it is known as critical illness cover and is slowly growing in demand around the world.

Despite the benefits of nationalized health care, critical illness can create an overwhelming financial burden for anyone.  The ability to work may be at risk due to the illness itself or the stress it brings can make it difficult to hold a job.  The basic functioning of any home can take a hit; bills, utilities, fuel, food are all dependent upon a steady income.  When dealing with a serious illness you could loose more than just your health.

Critical illness cover was created to minimize some of this burden by paying a lump sum within a 30 day time period the policy owner is informed of his illness.  The money is paid directly to the policy holder and can be used in any way.  The critical illnesses covered usually includes: stroke, heart attack, cancer, organ transplants, blindness, organ failure, Parkinson’s and Alzheimer’s along with several more serious conditions.

Critical illness cover assumes you will survive your illness and is designed to help with your expenses while in recovery.  HOWEVER, the explanation here has been simplified for clarity so be careful.  Many policies have some very tricky stipulations to your critical illness that must be met before your funds are released.  Read and discuss carefully any and every policy you may be considering.

“The principle of life is that life responds by corresponding; your life becomes the thing you have decided it shall be.” Raymond Charles Barker

How does your life correspond to critical illness cover insurance and death? That is the question we all must consider for ourselves and our families.

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If you have been told that you have a critical illness and your cover pays out you may want to use the money to help with medical bills or you may need things done to your house to make you cope better with your condition. your payout from your cover would also be tax free.  Critical illness may be classed as heart attacks and kidney problems, cancer, strokes etc.

Critical illness cover is different from Income protection.  This is when you have not been able to work for a set length of time, i.e.- about six months and it will pay out a monthly amount.

Choosing Critical Illness Cover Insurance

When you have received your quote and have asked about critical illness cover, you have to realise that there are quite a lot of different kinds of critical illness and different policies cover different illness’s.  Although all policies cover heart attacks, cancers and strokes you have to make sure that you get a quote for the cover that will grasp all your needs.  It is sometimes advisable to speak to an independent adviser before going ahead with the cover

New rules came into force in 2003 that change the conditions that applied to claiming on critical illness policies. These rules mean that all insurers will not cover illnesses such as non invasive skin cancer and suchlike.  Also any claims for heart attacks to be successful will need evidence of pains in the chest and changes on the ECG.  Angina and other moderate conditions are not covered by critical illness policies.

It is also noted that as well as the insurance companies main list of illnesses there is an other list that includes illnesses that are not serious enough to pay out on.  HIV & AIDS are not covered if they have been the result of drug abuse.  Minor heart operations and not taking advice from your doctor when recuperating from critical illness could also rule that your claim is null and void.

Critical Illness Cover Insurance For Your Family

Remember that if you have a family, critical illness cover insurance is good sense but if you are a single person it could be more important for you as it could pay off any mortgage that you have left to pay off.

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