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Bakewell Road, Orton Southgate, Peterborough
Business Hours Only
Business Hours Only
Appointment Available After Business Hours
Critical illness cover is an essential financial product that provides a lump sum payment if you are diagnosed with a specified serious illness. This coverage can help alleviate the financial burdens that arise during challenging health situations.
While state benefits are available for those who fall ill, they often provide minimal support—typically around £100 per week. If your employer’s sick pay is limited or ends after a short period, critical illness cover can provide crucial financial assistance. This payout can help cover medical expenses, private treatment costs, and everyday living expenses, ensuring that you do not deplete your savings during recovery.
Critical illness cover pays out a lump sum if you are diagnosed with one of the specific conditions listed in your policy. Unlike income protection insurance, which covers a broader range of incidents, critical illness cover focuses specifically on serious health issues that may prevent you from working.
Critical illness cover is typically sold alongside life insurance policies. When purchasing this insurance, you will determine how much coverage you need and for how long.
For example, you might choose to insure yourself for £100,000 over a 30-year term. It’s advisable to consult with a financial adviser to assess your family’s financial needs in case of serious illness.
The conditions covered by critical illness policies can vary by provider, but common inclusions typically include:
Some insurers allow you to add additional conditions for an extra fee and may also offer coverage for children under the policy.
Not all illnesses or stages of illnesses are covered by critical illness insurance. For instance, some policies may not cover all types of cancer or may require that symptoms be permanent before a claim can be made. Common exclusions include:
It’s crucial to read your policy documents thoroughly to understand what is and isn’t included.
Income protection payouts are generally calculated as a percentage of your earnings. For example, if you earn £40,000 annually and have a policy that pays out 60%, you would receive £24,000 per year while unable to work. Importantly, these payments are tax-free.
Income protection policies usually have a deferral period ranging from one month to a year before payouts begin. The longer the deferral period you choose, the lower your premiums will be. Insurers assess your inability to work based on three methods: activities of daily living, suited occupation, and own occupation. The own occupation policy offers the highest level of protection as it pays out if you cannot perform your specific job.
Income protection insurance can pay out for as long as you remain unable to work due to illness or injury, until the policy term ends or until your death. Many policies also offer support for returning to work after recovery.
When considering critical illness cover, keep these points in mind:
Commonly covered conditions include cancer, heart attack, stroke, multiple sclerosis, and severe organ failure; however, the specific illnesses covered can vary between insurers, so it’s essential to check your policy details.
Critical illness cover provides a lump sum payment upon diagnosis of a specified serious illness, while life insurance pays out a benefit to your beneficiaries upon your death, regardless of the cause.
Many critical illness policies offer coverage for children, providing a payout if they are diagnosed with a covered condition; however, the amount and terms can vary by insurer.
The cost of critical illness insurance premiums is influenced by your age, health status (including pre-existing conditions), lifestyle choices (such as smoking), and the amount of coverage you choose.