Why critical illness cover is important
16 Nov 2020
The notion of protecting our family and finances in the event of our death has become pretty normal. Although not everyone that ideally should have a life insurance policy is covered, it’s a generally well-known product. What about critical illness cover though?
Think about it - you’re probably far more likely to become ill or injured before you turn 65 than you are to pass away, right? If you suffer a serious and debilitating illness that means you can’t go to work, then your family is likely to be put under some major financial stress. This is where critical illness cover comes in.
What is critical illness cover?
Critical illness cover gives the policyholder an income or lump sum of money in the event that they are diagnosed with an eligible illness or disability. In this way, it differs from income protection which instead replaces a percentage of your monthly salary. Plus - you can take out critical illness cover even if you’re not employed (such as stay-at-home parents), just so long as you can keep up your monthly premiums.
If you find yourself diagnosed with a serious illness or disability, critical illness cover gives you a financial safety net to cover your regular outgoings such as your mortgage or rent, debt repayments, or any healthcare or specialist equipment that you might find yourself in need of. A payout can be a much-needed respite in difficult and trying times.
What conditions does critical illness cover?
The conditions covered do differ between providers, but it’s usually long-term and serious conditions - but not if they are terminal. This could be a heart attack, a stroke, cancer, multiple sclerosis, Parkinson’s disease, or the loss of arms and legs. It’s important to check your policy fine print and check that a policy covers you for everything you’ll need it to. You might come across a policy that covers 10 main illnesses, and another might cover around 40. Some might even cover 100! The more illnesses covered, the more expensive the premiums are likely to be.
It is important to note that critical illness cover does not payout if you pass away from the condition, however there is a survival period clause in most CIC policies where you’ll get a payout on a critical illness claim in the event of death, as long as the ill person has survived the specified period between diagnosis and their death - usually varies between 10-30 days, depending on the provider. Having a life and critical illness combined plan avoids the need for the survival period being met. This is a good way to ensure your family receives financial support no matter what happens to you.
Why is it so important?
Even when we’re alive, we might not be in the best condition to care for the ones we love. We’re very lucky to live in an age where life expectancies in the UK increase each year. Whilst this means more treasured moments with our families, it also means we’re more likely to develop various health conditions as we grow older - no matter how careful we are.
And if you have financial responsibilities and dependents, it’s really important to ensure that these are protected in some way - whether that’s through life insurance, critical illness cover, or another suitable life insurance product. Being unable to meet your mortgage repayments alone might mean could mean you’ll lose your home - which is the last thing you need when you’re in bad health. Never underestimate the comfort of your own surroundings when times are hard.
Before you take out a policy, it’s worth checking with your employer if they have any employee benefits in place that would cover you if you were too ill to work. Statutory Sick Pay (SSP) is often provided by employers at a standard rate of £95.85 for up to 28 weeks. Although this might sound great, you do need to meet certain criteria to qualify for this and realistically, it might not be quite enough to meet your needs.
You may be lucky enough to have people around you willing to help you financially if you fall on hard times, or perhaps you’ve got a substantial amount of savings to fall back on in emergencies. Are these long-term solutions though? Critical illness insurance is there to give you a buffer, so you can keep those hard-earned savings aside for something you really want to spend it on - such as a family holiday, a new car, or a gift to your children.
No one wants to think about the possibility of getting seriously ill or injured. When you take out critical illness cover, sure you might still worry about getting sick, but at least you don’t have to worry about the financial implications and the strain that would put on your family.
Protect the life you love and take out a critical illness insurance policy today. Our expert team is perfectly placed to advise you. We’re specialists in the complete range of protection insurance options, so give us a call on 0800 316 7253 to receive expert guidance from a team that cares.