Author:Jonathan Harvey

Read:13 mins

How to figure out if you need critical illness insurance

Critical illness cover is a good idea for anyone who helps provide for dependants. What would your family or loved ones do if you were to fall severely ill and could no longer work? If you’re unsure, critical illness cover might be the answer you’re looking for. If you become critically ill, you would receive a tax-free lump-sum to ensure that you’re still able to provide for them, even if you can’t work.

You probably can. But, first of all, you need to ask yourself ‘Is critical illness cover right for me?’. Anyone between the ages of 18 and 70 can get critical illness cover, as long as they do not already have a critical illness. If you already have a critical illness, you may still qualify with some providers, but the coverage will not cover any illnesses for which you’ve already been diagnosed.

In order to apply for critical illness cover, you must:

  • Be a UK resident or citizen
  • Be over the age of 18
  • Be under the age of 70 (many providers will require you to be under 60 or 65)

What is Critical Illness Insurance?

Critical Illness Insurance, otherwise known as Trauma Cover or CI, is a type of insurance policy that provides a lump sum payout in the case that the policyholder is diagnosed with a covered critical illness. It is also known as critical illness protection. It is an important form of protection for individuals and their families should the worst happen.

Imagine a safety net that catches you during life’s most challenging moments – that’s what Critical Illness Insurance offers. It’s not just a financial lifesaver, but also a balm to the emotional stress that arises when a critical illness strikes. With features like covering medical bills, replacing lost income, settling debts, or adapting your home for a disability, this type of insurance keeps you sailing smoothly through the stormy seas of life.

But, not all nets are woven the same. With a plethora of insurers offering Critical Illness Insurance, it’s vital to scrutinise each policy’s features to secure the best coverage for you and your loved ones. Pay special attention to any exclusions or pre-existing conditions that might affect your eligibility, and ensure the policy you choose aligns perfectly with your unique needs.

In a world where certainty is a luxury, Critical Illness Insurance offers invaluable protection and tranquillity. It’s not just an insurance policy; it’s an essential shield that every individual and family should consider wielding.

What is a Critical Illness Policy?

An insurance policy that steps in like a financial superhero when serious illness strikes. That’s what Critical Illness policies are all about. They provide a financial shield in the wake of serious health conditions, offering either a lump sum payout or income protection upon diagnosis of a critical illness stipulated in the policy.

Picture it as a financial life raft, providing essential support that can help manage medical bills, compensate for lost income, and cover future medical expenses. It can even keep up with everyday expenses like rent or mortgage payments. Some policies go the extra mile, offering perks like settling a bad credit mortgage or providing an income that adjusts based on how severe the illness is.

Rest assured, these policies are not one-size-fits-all. They can be customised to suit your unique needs and cover a wide variety of critical illnesses, from cancer and strokes to multiple sclerosis, heart attacks, and certain degenerative diseases. It’s crucial to take stock of your current health status when choosing a policy to ensure it offers the right level of protection for you.

Compare Insurance Types

Critical illness insurance provides a lump sum to help bear the financial burden of treatment and care. It’s not all out-of-pocket and it’s definitely not all doom and gloom.

There’s also health insurance, your trusty sidekick that steps in when medical matters arise. Whether it’s something that needs urgent attention or a specialist’s care, you can rest easy knowing you’re covered.

Then, there’s life cover, your financial superhero, also known as life insurance. In the event of your death, it ensures a sum of money is paid to your family or dependants. This helps secure the financial future of your loved ones, giving you peace of mind even in the face of the inevitable.

Critical Illness Insurance

Critical illness insurance hands you a lump sum if you’re hit with a severe medical condition, typically when a certain number of symptoms appear.

Why is this so crucial? Well, imagine if you had to take time off work or your income took a hit because of the long-term effects of an illness. This is where critical illness insurance steps in, offering you much-needed financial security in your time of need.

Health Insurance

Never having to worry about the financial burden of a sudden illness or injury. That’s the peace of mind that health insurance can provide. It’s like a safety net for your wallet, covering expenses from doctor’s visits and medication to hospital stays and surgeries.

There are numerous ways to get this coverage. You could opt for a private plan or one provided by your employer. And don’t forget, the government also offers health insurance options. So, you see, safeguarding your health and finances doesn’t have to be a daunting task. Let’s explore these options together!

Life Cover

Life cover, a type of insurance, that pays out a pre-agreed sum, ensuring your family’s financial security and letting them breathe a little easier amidst the pain of loss.

More than just a safety net, it’s a vital piece in the puzzle of financial planning. It’s about gaining peace of mind, knowing that if life throws the unexpected your way, your dependents won’t be left in a financial lurch. Truly, it’s an act of love, a way of looking after those you hold dear even when you’re no longer around.

Life Insurance

Having a financial safety net, even during life’s most unpredictable moments. That’s where life insurance steps in. It’s not just about death coverage – it’s about providing a reassuring buffer for your family when they need it most.

Life insurance is like a superhero, swooping in to save the day when illness or injury alters your earning ability. It’s not about the gloomy ‘what ifs’, but about being prepared for any curveball life may throw at you or your loved ones.

Think of a life insurance policy as your personal guardian angel. It’s not just a document from an insurance company – it’s peace of mind, it’s security, and it’s a blanket of protection that money simply can’t buy.

Terminal Illness

It is important to ensure you have adequate insurance cover in the event of a terminal illness. Many policies now offer cover for both the cost of treatment and any changes to lifestyle that might be required. For example, some policies might offer financial assistance if you need to make adaptations to your home or vehicle due to a terminal illness. It is also worth considering whether you would benefit from additional medical protection such as a life assurance policy that could pay out a lump sum tax free when you are diagnosed with a terminal illness.

Pre Existing Condition

Imagine being hit by a life-altering medical condition that not only wreaks havoc on your health but also your finances. We’re talking about critical illnesses here – think cancer, heart failure, stroke, and even Parkinson’s disease. These are serious health threats that demand a high level of medical attention and long-term care.

Now, let’s talk about pre-existing conditions, those pesky health problems you had before you even thought about getting health insurance. These could be anything from diabetes and asthma to heart disease and certain types of cancer. Navigating the insurance world with a pre-existing condition can be a tricky business, as it might make getting coverage challenging or even impossible.

That’s why it’s crucial to have a heart-to-heart with your insurer about what sort of pre-existing conditions they won’t cover. Knowledge is power, after all, especially when it comes to safeguarding your health and your wallet.

Mortgage Protection

Critical illness insurance and mortgage protection are two types of insurance policies that are important to consider when taking out a mortgage. Critical illness insurance pays out a lump sum should the policyholder become critically ill, and mortgage protection insurance pays off the mortgage if the policyholder passes away.

Did you know that some mortgage protection policies might not cover your whole mortgage? And shockingly, certain critical illness policies might leave out some serious diseases. So, it’s crucial to delve into the nitty-gritty of the terms and conditions. Also, keep in mind that their costs can sometimes skyrocket, making it all the more important to play the field and compare prices. At the end of the day, securing the right insurance policies will give you that comforting sigh of relief, knowing your mortgage is in safe hands.

Critical Illness Claim

Critical illness insurance offers – a payout if you’re diagnosed with a severe health condition listed in your policy. These conditions might include the likes of cancer, heart attack, stroke, multiple sclerosis, or kidney failure. The cost of this insurance is a regular premium, a small price to pay for potentially life-changing financial support in times of need.

The cost of critical illness cover can be as varied as the individuals it serves, influenced by factors such as the level of coverage, your age, health, occupation, and more. Your premiums could be as low as £10 a month or scale up to hundreds of pounds. When weighing the cost, consider elements like your willingness to pay a policy excess, the length of the policy, and the value of the lump sum payout.

Think of it this way: the cost of a critical illness policy is likely a small fraction of the financial burden you’d face in the event of a life-threatening illness. The lump sum payment can be a lifeline, covering costs associated with long-term care, rehabilitation, or medical treatment. It’s not just about the money: securing your family’s financial stability and gaining peace of mind are worth every penny of the policy cost.

What is Income Protection Insurance?

Income protection insurance is an essential tool safeguarding individuals and families from the financial blows that unemployment, disability, or severe illness can inflict.

Here’s how it works: you pay a monthly premium and in return, the insurer promises to provide a steady income if you’re unable to work due to disability or involuntary redundancy. This income stream continues until you can return to work or until the policy term expires. Plus, most policies even offer a lump-sum payment if you become permanently disabled due to your condition.

Income protection insurance is like having a financial bodyguard, ensuring your financial security when the unexpected strikes. It takes care of your bills, credit card payments, and other financial commitments, allowing you to maintain the lifestyle you enjoyed before your disability.

But remember, this type of insurance isn’t a one-size-fits-all solution. It’s crucial to shop around for the most suitable policy for your unique needs. And, don’t forget to understand the differences between income protection and other protection forms like life and critical illness cover.

Purchase Critical Illness Insurance from Regulated British Insurers

Life insurance is an important part of the financial landscape in the UK as it provides a degree of security and peace of mind to those who are buying it. It provides you and your family with the assurance that should the worst ever happen, you and your loved ones will still be able to cope.

Prudential Regulation Authority and Financial Conduct Authority

Ever wondered who ensures that your life insurance is fair, reliable, and regulated? Look no further than the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). These two governing bodies are the watchdogs of life insurance in the UK, making certain that insurers stick to strict regulations and adapt to legislative changes. They also safeguard consumers by ensuring that claims handling is fair and premiums align with actual costs.

What’s the difference between the two, you ask? The PRA focuses on prudential regulation of life insurers. It sets standards for capital strength and ensures that risks to customers are managed properly. Meanwhile, the FCA supervises the conduct of life insurance. It’s their job to protect customers, guarantee fair contracts, and set minimum standards for disclosure.

Working in unison, the PRA and FCA aim to guarantee that consumers receive the financial products and services they need, with the assurance of fair outcomes. They uphold the highest standards in the industry and continually review their policies to keep them current and effective.

Do I need to have life insurance in order to get critical illness cover?

Not always, but with many providers, yes.

It’s rare to find critical illness cover that’s not bundled with another protection plan, such as life insurance, medical insurance or mortgage term assurance.

What if my employer offers benefits that pay out in case of illness?

You may not need critical illness cover, but check the terms of your benefits carefully to be sure. You might be offered payment for a short period of time, or in the case of temporary illness, but it’s not necessarily enough to cover a long-term or permanent medical condition. Usually, employer benefits only cover a percentage of your income as well.

What if a critical illness runs in my family?

Critical illness cover won’t cover any illnesses you’ve been diagnosed with before. Some providers will even ask for your family medical history, and your coverage may exclude any genetic illnesses that run in your family as well. What if I make a full recovery and go back to work? Once your critical illness cover is paid out, it is yours to keep. If you eventually recover and go back to work, nothing changes.

Do I need critical illness cover if I’m single?

Maybe. While your financial burden would be much greater if you had a family, you may want to consider critical illness cover to assist with covering any personal expenses if you’re unable to work. However, many people who are unmarried and without children are able to save up enough money for medical emergencies.

Do I need critical illness cover if I don’t have kids?

If you support a spouse, parent, sibling, or other loved one, you should still consider critical illness cover, as they will struggle financially without your assistance.

Do I need critical illness cover if I’m a single parent?

It is a good idea. If you’re ill and unable to work, how will you provide for your children? If you don’t have an answer to that question, you should consider critical illness cover.

How can I get covered now?

This one’s easy! Click the button below to get yourself a free life insurance quote.

Is critical illness cover right for me? If yes, then get your free quote now!

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Jonathan Harvey is a distinguished expert with over twenty years' experience in the UK's life, health, and funeral insurance sectors. A Cambridge graduate and Fellow of the Chartered Insurance Institute, Jonathan has a proven track record in designing innovative insurance policies, and a strong reputation for making complex insurance matters comprehensible for the public. Known for his empathetic approach, he has helped thousands make informed decisions on their future security. Regularly contributing to leading publications and hosting educational workshops, Jonathan's commitment to client service and public education truly sets him apart in the insurance industry.

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