Insurance

Critical Illness

What is it?

A policy that pays out a lump sum on diagnosis of a serious condition, such as heart disease or cancer.

Why do your need it?

Advances in medical science mean that more people are now surviving serious illness than in previous years. While this is good news in itself, many people are faced with the realisation that they may not be able to return to work, or indeed, wish to. Critical Illness is, in many ways, similar to Life Insurance with one big difference – the insured is still alive!

Things to bear in mind

Critical Illness plans are built around a core of the most common serious conditions anyone may suffer. These core conditions are:

• Cancer
• Coronary artery by-pass surgery
• Heart Attack
• Kidney Failure
• Major Organ transplant
• Multiple Sclerosis
• Stroke

Some policies may include other illnesses such as Alzheimer’s and Parkinson’s disease. Others include a list of other, less common, conditions, such as blindness or coma. Some policies also offer a ‘buy back’ option which allows your client to literally buy back critical illness cover after they have already claimed on a critical illness (and at a time they would be uninsurable with other providers).

As mentioned in the life assurance section, critical illness is often bought as an optional extra on a life insurance contract (known as accelerated critical illness cover). Stand-alone critical illness plans do not normally have associated life insurance.

As with life assurance policies, both guaranteed and reviewable rates are available. In addition, companies offering critical illness contracts have recently introduced reviewable conditions. Broadly speaking, this means that if an illness were to become curable in the future, a company could simply knock it off the list of specified conditions they cover. Again, this will have the effect of reducing the premiums compared with companies with more comprehensive cover so a good understanding of the features and benefits offered by the different life assurors is essential.

For further information – please contact our office and speak to one of our advisers 0800 811 8885 or complete our enquiry form.