Diagnosis of a critical illness, of course , leads to the traumatic and worrying time. For a lot of such sufferers, one of the immediate worries is the very practical financial one of ongoing to make ends meet when it might no longer be possible to work – especially if there is also a family or other dependants to consider. Since critical illness insurance is normally designed to help allay some of those monetary worries, it might be worth looking briefly at exactly what critical illnesses are covered and how this particular insurance works.
Although it is a naturally quite fundamental question, there is no basic answer since different policies embrace different definitions of a “critical illness”. Before deciding on a particular insurer, consequently , prospective policy holders might want to examine closely the list of specified illnesses. Typically, of course , the more restricted the list, the cheaper the premiums are likely to be. This means that there is likely to be a policy open to suit most pockets.
Whatever the insurance of critical illnesses, however , it could be noted that most policies exclude specific types of cancer and that some claims might be subject to the insurer’s own medical examination and assessment of the condition or illness.
How does it work?
The principles are simple plus straight forward. The policy holder pays a fixed premium each month and, in the event of them being diagnosed with a critical illness (as defined by the insurer), a single, tax-free, lump sum benefit is paid out towards the policy holder.
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The way in which such a benefit will be spent is entirely up to the client, but might be used to replace lost income from work, to help finance any alterations that might be needed to the present living arrangements for a critically sick patient, or for buying in professional nursing or health care.
Critical illness insurance provides cover for an decided term – which might typically end up being as short as 5 many years or longer. Some insurers, however , may offer a greater degree of versatility by allowing renewable term include, by which the policy holder is able to restore the policy at various time periods (say, every five or 10 years).
Other insurers have options that allow for the insured term to run for the remaining life of the mortgage. In other words, this might be used as an option to mortgage life insurance, whereby the risk of becoming diagnosed with a critical illness is insured for the term of the mortgage and the insured benefit might be calculated with regards to the outstanding mortgage to be compensated.
Combined critical illness and insurance coverage
An increasing number of insurers now offer the accessibility to combining critical illness insurance with life cover. With such a mixed policy, a single monthly premium covers the policy holder not only against the danger of being diagnosed with a critical illness, but additionally the guarantee of a benefit paid to the policy holder’s nominated beneficiaries in the event of his or her death. Although the solitary premium is probably lower than the cost of covering against critical illness and purchasing life cover separately, policies are likely to be restricted to a single payout.
David Thomson is Chief Executive of BestDealInsurance a totally independent specialist broker dedicated to offering their clients with the best insurance plan deal.