Why Would You need Critical Illness Cover

Summary

The things you should consider when taking out critical illness cover and the varietyof companies proffering thisstyle of policy.

Your mortgage provider may propose quite a few financial products together with critical illness cover. But, as they are not experts in this market, you will possibly find a superior offer elsewhere.

The level of cover on offer is just as significant as the premium when looking forcritical illness cover. The policies from Alliance and Leicester and Nationwide are particularly restricted says a senior adviser at Direct Line, an online and telephone life assurance broker. Standard Life covers only eight critical illnesses, with Friend Provident covering just 9, whereas the market leader, Aviva, covers 39.

Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the illnesses not covered by some of the big insurers. The senior advisersays that it is not worth consideringa policy, which insures less than 25 conditions.

An umbrella term included in all policies is ‘total and permanent disabilities’, this term means you are covered for any condition, which prevents you working ever again.

You need to be alert to the lanuage as some plans cover ‘any occupation’ while other policies only insure your ‘own’ occupation. You will not get a settlement under a ‘any occupation’ policy unless you are utterly incapable of carryingout a job, however unskilled. Consequently The adviserrecommends you sign up for a ‘own’ occupation policy.

There are a range of companies as well as Aviva who offer full insurance including Legal and General, Norwich Union, Standard Life, Scottish Equitable, Scottish Provident, Friends Provident, Liverpool Victoria, Skandia and Zurich Life.

In the past life cover  has been sold by mortgage lenders. Therefore many people never considered critical illness insurance. There are 4 times as many claims on critical illness insurance compared to life policies, when the client has taken out both kinds of policies.

Life insurance cover is tremendously important, especially if you have family, as they will welcome the lump sum settlement on your death. However critical illness cover ought to be the priority if you have debts to settle, above all a mortgage. The Directorbelieves critical illness to be vital as it covers the cost of your living expences, even if you are sick and unable to work.

The monthly payments will be higher if you are a smoker and will also rise if you are older. A decreasing term policy, which is intended for people only wanting to cover the cost of their home owner loan, is the cheapest.

One of Savill’s customers, a 26 year old non-smoker, who required150,000 pounds cover from a critical illness, long term policy, was quoted £14-40 per month, which rose to £24-30 for smokers. However an adviserfrom Direct Line suggested a policy, which gave both life protection and critical illness cover for 17 pounds 80 pence a month, so paying a higher premium could be worth it.