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Understanding Critical Illness Insurance

Featured image by Elf-Moondance from Pixabay 

Critical illness insurance helps by offering a financial cushion that you may badly need during times of serious illness. To find out more, read on.


Lots of people take out life insurance when they get a mortgage. A life insurance policy ensures that should they die sooner than they expect, their family will be able to pay off the mortgage and won’t lose their home. Life insurance, however, does not cover every eventuality. Serious illness can prevent a person from working or managing their business, and this can cause serious financial hardship. Being unable to work or run your business has the potential to make paying a mortgage or other household bills incredibly difficult.

This is why critical illness cover is so important. It helps by offering a financial cushion that you could so badly need during times of serious illness. It works by taking some of those financial worries away. This can allow you to direct all of your energies into getting better.

What Is Critical Illness Insurance?

Critical illness cover pays out a lump sum if you are diagnosed with one of the conditions that the policy you have taken out covers. This is a one-off payment that is tax-free in most cases. It can assist you with paying for treatment, or it could help you with your rent or mortgage payments. It could also pay for any changes you might need to make to your home. For example, you might need to adapt your home for a wheelchair and have other associated costs. In short, it gives you a degree of financial security at a time when your only worry should be your health.


What Does a Critical Illness Policy Cover?

The conditions that your critical illness insurance covers will vary from one policy to another. Each policy will carry a specific list of the conditions that the policy covers. The most comprehensive critical illness policies cover at least 50 different medical conditions. However, many are more limited.

Examples of some of the conditions you might expect to see on a policy include:

  • Certain types of cancer (Most policies cover all “staged” cancers, with the exceptions of some non-invasive types of cancer, including carcinoma and early stage prostate cancer.)
  • Heart attack
  • Stroke
  • Multiple sclerosis and other similar conditions
  • Parkinson’s disease
  • Major organ transplant
  • Alzheimer’s disease
  • Traumatic head injuries

The majority of policies will also consider disabilities that you may have as a result of an illness or injury. There are policies that will also make smaller payments for conditions that are less severe. Some even make payments if your child is diagnosed with one of the conditions specified.

There is a standard list of conditions that are covered as set out by the Association of British Insurers (ABI).


What Isn’t Covered?

Of course, not every condition is critical enough for a critical illness policy to cover. Examples of conditions that are not covered include:

  • Pre-cancerous or carcinoma in situ
  • Broken bones and other similar injuries
  • Hypertension, or blood pressure that is abnormally high
  • Illness that relates to substance abuse (drug or alcohol)
  • Any conditions specifically excluded by the insurer after underwriting

How Can I Ensure I Get the Right Cover?

With so many different critical illness cover products available it can be hard to know which one will be the most appropriate for your needs. If you want to make sure the product you select is suitable for your requirements, it can be a good idea to use a broker. They will be able to help you get the right cover at an affordable price. In addition, they will also be able to offer you support and advice during the process of applying for your critical illness cover.

They will also be able to discuss with you the range of conditions that the different providers cover.  In the event that you need to make a claim on your policy they will be there to help you every step of the way, making the whole process as simple and stress free as possible.