Critical illness - Quick FAQ's
What is critical illness insurance?
Which critical illness's are normally covered?
How much critical illness insurance do I need?
How much does critical illness insurance cost?
Am I paying too much for my existing critical illness plans?
What is a critical illness insurance?
A critical illness insurance plan is designed to pay out a lump sum of money, tax free should the life assured be diagnosed with a critical illness during the term of the policy
The cheapest form of critical illness insurance is "Term Assurance"
As there is no investment element, all of the premium can be used to provide insurance allowing quite high levels of cover to be achieved from relatively low premiums.
What options are available?
A critical illness term assurance plan can provide level cover, i.e. the same amount of money will be paid whenever a claim is made during the term, or decreasing cover, i.e. to protect a capital repayment mortgage where the lump sum needed gradually decreases over the term of the policy.
These plans can also include a waiver of premium benefit so that the company will in effect waive premiums after a specific period if you were unable to pay due to an accident or long term illness.
This type of cover can also be combined with life cover to provide the lump sum on diagnosis of a critical illness or death if this should occur earlier.
Critical illness plans can be written on single life or joint life basis, noting that a joint life basis will only pay out once.
There are a handful of providers that offer the option to set up critical illness plans that pay out a regular tax free income over the remaining term of the policy rather than a tax free lump sum. Financial advisers generally refer to these policies as family income benefit plans but they are very rarely used to provide critical illness insurance benefits.
Which Critical Illness's are covered
Illnesses typically covered include: -
Heart Attack
Major Organ Transplant
Cancer
Stroke
Coronary Artery by-pass
Paralysis/Paraplegia
Kidney Failure
Aorta Graft Surgery
Alzheimer's Disease
Loss of Speech
Multiple Sclerosis
Blindness
Angioplasty
Loss of Hearing
Loss of Limbs
Brain Tumour
Motor Neurone Disease
Severe Burns
Are my children covered?
It is not unusual for these policies to include free cover for children of the life assured's children that are between the ages of 6 Months and 18 years. Normally, as a percentage of the total cover, and up to a maximum amount, for example up to £25,000. However, it should be noted that not all plans provide this extra benefit and if it's important to you you should check the policy details carefully before committing to a specific plan.
How much critical illness insurance do I need?
If you would like some help to establish how much critical illness insurance you might need, you can visit the main site to use the life insurance finance navigator or if you would prefer to speak to an independent financial adviser you should contact us.
How much does critical illness insurance cost
Because of the special discounts we provide for our online clients, it's cheaper to get your critical illness insurance through Money Minder Online than going direct to the provider. See our comparison table to find out how much difference this can make and then get a free online life insurance quote.
Are you paying to much for your existing life insurance plans?
Over the past few years, the cover that critical illness insurance plans provide and the premiums people have to pay for it has varied considerably. These variations have been noticeable not only between competing providers, they have even been changing at different times with the same provider.
For these reasons, if you already have a critical illness insurance plan in place, it would be a very good idea to review it to make sure that it is still the right type and level of cover for you. From time to time you should check that all of your protection plans are still appropriate to your needs and are providing you with good value for money.
If you have any existing life insurance, mortgage protection, critical illness or income protection plans, use our FREE quote service, to establish if you can save money on your current policies. After all, why pay more than you need to!
