Crucial Illness Insurance – What’s Protected?

Associated with a critical illness, of course , leads to a traumatic and worrying time. For a lot of such sufferers, one of the immediate worries is the very practical financial one of continuing 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 typically designed to help allay some of those financial worries, it might be worth looking quickly at exactly what critical illnesses are covered and how this particular insurance works.

What’s covered?

Although it is a naturally quite fundamental question, there is no easy answer since different policies adopt different definitions of a “critical illness”. Before deciding on a particular insurer, consequently , prospective policy holders might want to examine carefully the list of specified illnesses.
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Generally speaking, 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 offered to suit most pockets.

Whatever the insurance of critical illnesses, however , it may be noted that most policies exclude certain types of cancer and that some claims might be subject to the insurer’s personal medical examination and assessment of the condition or illness.

How does this work?

The principles are simple plus straight forward. The policy holder pays a fixed premium each month and, in the event of her or him being diagnosed with a critical illness (as defined by the insurer), a single, tax-free, lump sum benefit is paid out to the policy holder. The way in which such a benefit can be spent is entirely up to the policy holder, but might be used to replace lost income from work, to help finance any alterations that might be needed to the existing living arrangements for a critically sick patient, or for buying in expert nursing or health care.

Critical disease insurance provides cover for an agreed term – which might typically be as short as 5 yrs or longer. Some insurers, nevertheless , may offer a greater degree of flexibility by allowing renewable term protect, by which the policy holder is able to restore the policy at various time periods (say, every five or 10 years).

Other insurers have choices that allow for the insured phrase 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 being diagnosed with a critical illness is insured for the term of the mortgage as well as the insured benefit might be calculated with reference to the outstanding mortgage to be compensated.

Combined critical illness and life insurance

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 addresses the policy holder not only against the danger of being diagnosed with a critical illness, but additionally the guarantee of a benefit compensated to the policy holder’s nominated beneficiaries in the event of his or her death. Although the one premium is probably lower than the cost of insuring against critical illness and buying 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 coverage deal.