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When Does Critical Illness Cover Pay Out?
18 Jul 2019
To make sure that it does, you’ll have to pay close attention to your policy’s terms when you purchase it. Here are some of the key things to keep in mind…
Make sure your policy actually provides that vital coverageThe idea behind critical illness cover is that it pays out if you are diagnosed with any of a number of serious illnesses specified in the terms of the policy. The Association of British Insurers (ABI) has set out guidance on the minimum standards with which critical illness policies need to comply.
You can expect your critical illness policy to cover cancer, a heart attack and a stroke at a minimum, although again, limitations are likely to apply. Some early stages of common cancers don’t tend to be included, for instance. Even for the conditions for which your policy does pay out, you may need to be severely ill or totally disabled before you are entitled to any money.
The good news is that there are rules stating policy documents must be written in easy-to-read plain English, so you don’t need to just take your life insurance advisers word for it that a particular condition will be covered.
We would always advise that you scrutinise your documents for the policy you’re considering as there will be very specific terms for the certain illnesses that are covered.
What about pre-existing conditions?A common issue with this type of insurance is existing medical conditions – so this is any illnesses that you have had before taking out the policy. Some critical illness policies cover existing medical conditions, whilst others don’t. The insurer will also ask for information on your family medical history when you buy your policy, and may charge you more or attach conditions as a result of what you tell them.
You must give full details about any pre-existing conditions that you or other members of your family have had, because anything you leave out could provide the insurer with grounds to refuse any claim you later make.
So I’ve made a claim – what happens next?If you are diagnosed with a serious condition and make a claim in relation to this, the insurer will assess your situation, checking that your diagnosis complies with the terms and conditions of your policy. You can then usually expect the payout to be made within 30 days of making your claim.
Bear in mind that a waiting period might apply for a given policy – for example, the insurer may require you to survive for 14 days after diagnosis before it agrees to pay out. It’s also important to note that critical illness cover only pays out a single lump sum in case of an acceptable claim – after which, the policy ends. This is different from income protection insurance, which can provide you with a continuous income to pay your bills if sickness or injury means that you can’t work.
However, some critical illness policies might make a smaller payout for less severe conditions, or even if your child is diagnosed with one of the conditions specified in the policy.
Contact the experts at LifeSearch for tailored and in-depth guidance. We know how important it is to only buy critical illness cover that will meet all your needs and that you know will protect you if you ever need to make a claim. That’s why our fee-free advice and support can be pretty handy!
Not only will we help you out by outlining your options in light of your circumstances, but we can also give you a great-value quote – so don’t hesitate to call us on 0800 316 7253.
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