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 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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