Critical Illness Cover

Life Insurance is often used as an umbrella term for a range of policies including life cover, critical illness and income protection. All three types of cover serve a distinct purpose and having “fully comprehensive” life insurance will mean having all three policies in place should you ever need them. This blog will explore critical illness, what it is, what it covers and how it can be tailored to suit your own unique financial needs.

Critical illness is a policy which provides protection against the financial implications of suffering from or being diagnosed with serious illnesses. Conditions covered under a critical illness policy vary between insurance providers but common conditions such as cancer, heart attack, dementia would be covered by all providers. There are several elements which can be manipulated when setting up your critical illness policy and these are explained below.

A critical illness policy is most used to provide cover for your mortgage debt or cover until your anticipated retirement. Covering until your anticipated retirement helps provide a lump sum allowing you to maintain your standard of living before you suffered the critical illness. The policy can help make any necessary home and lifestyle adjustments, provide financial support if you are unable to work as much as before as well as clearing/reducing any debts you have.

Just as with life cover, critical illness can be set-up on a level or decreasing basis when used to cover a mortgage. Level cover would be used to cover an interest-only mortgage; decreasing cover can be used to cover a repayment mortgage. The term of the policy is set to match the term on the mortgage meaning if you’re to suffer a critical illness, then the policy will clear your mortgage.

Add-ons and enhancements to critical illness policies allow the cover to be as thorough as you want it to be. Most insurance providers will offer two levels of critical illness cover. A standard policy will be cheaper and cover few conditions and there will be an enhanced policy which will be more expensive but will cover more conditions. Specifics regarding what each policy covers would be available before making any decision. Further to this, most providers will include cover for any children and some even for any future children as part of a policy. Similarly, this is often offered as either standard or enhanced cover.

Total permanent disability (TPD) cover is a common component of a critical illness policy. TPD cover means if you suffer any health condition preventing you from ever working again, regardless of whether it is on the specified list of critical illness conditions, the insurance provider will pay out on the critical illness policy. TPD is often included in the cost of a basic critical illness policy but with some providers it will be an optional extra. TPD can come in different forms so it’s important to be aware of the specifics of any TPD cover on your critical illness policy.

Getting the appropriate life insurance policies gives you peace of mind that you and your loved ones are financially protected whatever happens. If you want to review your current policies, want to take out critical illness cover or want to know more about life insurance in general, we’re here to help with free, professional advice.