Critical Illness Cover
Critical Illness cover pays out a Tax-Free lump sum if you’re diagnosed with one of the insurers pre-set illness, this is a way of planning for the best and preparing for the worst.
The policy pays out on death or critical illness, whichever happens first.
What can Critical Illness Cover Pay-out For?
- Cover the cost of living during your recovery time
- Help towards the cost of treatment
- Allow your partner to take time off work to aid your care
- If you beat the illness, most people take a well deserved holiday after dancing with death
- Anything else you see fit
- Some policies include cover for your children
Is Critical Illness Cover right for me?
Life insurance will provide your family with the financial protection they’ll need if you’re no longer there. To be blunt! If you’re dead, you can’t go to work to earn an income to pay for your mortgage/rent and bills.
However, if you were to fall critically ill, it can temporarily put you and your family in a similar financial position.
When you have your common cold or flu, you might take a cold remedy and get some rest so you can recover within a week or two so you can get back to normality. But what if you are suffering from something more serious?
Critical Illness Cover becomes helpful if you were knocking at death’s door with a heart attack, cancer, stroke or any other conditions that fall under the insurer’s critical illness conditions. Similar to when you have a cold you’ll want to focus on your health rather than your wealth but recovery time can be up to two years or more in some cases.
How much should I cover myself for?
Most people get confused about how much cover to take, which can spike up the monthly premiums. 1 in 2 people will be diagnosed with cancer within their lifetime so it’s more likely you’ll become critically ill than passing away during the term of the policy. This is the reason why critical illness cover costs more than life insurance.
Most people try to cover their entire mortgage under a critical illness cover plan which makes sense to do when you’re young because that’s when you get the best prices.
If you’re slightly older, to bring the cost down it’ll be worthwhile to consider covering yourself for two years worth of your salary. This will give you enough breathing space to focus on your health and staying alive and being there for your loved ones in the long run. If two year’s salary is still too expensive then two years worth of your essential outgoings is another option.
How Long Should I Cover Myself For?
Most insurers can cover you up until the age of 70.
One option is to cover yourself until retirement, hopefully, you should have a pension in place and your income won’t change if you fell ill.
Cover yourself for the term of the mortgage.
Cover yourself until your youngest child is financially independent.
A common question our clients ask is, ‘should they take out Income Protection or Critical Illness Cover’. This is not a straightforward answer to give and it’ll be wrong of us to generalise. Factors like the savings you have, your employment benefit and your budget will play a key role. For these reasons it’s best to speak to us before making a decisions about which cover is best for you.
Our advisers can guide you on which option is better suited to your circumstances.
