Critical Illness Cover
Critical or Serious Illness Cover
How Do I Know the Right Insurance Policy for My Situation?
This will help you to determine how much you want to be covered for and how long you want to be covered for. If you are covering your mortgage for example, then it could be you choose a term that matches the number of years your mortgage is going to run for and a benefit amount that matches the mortgage balance. Or you may want to choose a longer/shorter term and different benefit amount if you are taking the policy out for a different reason.
Types of Critical Illness Insurance Policies
- Decreasing – this is where the amount the policy will pay out decreases over the term of the policy. This is usually most suitable if you are taking the cover out to repay your mortgage and you have a repayment mortgage.
- Level – this is where the amount of cover remains the same over the term of the insurance policy. For example, if you take out cover for £100,000, regardless of when you claimed during the term of the policy, £100,000 would be paid out to you. This may be suitable if you are wanting to provide a lump sum to help with living costs upon diagnosis of a critical illness.
- Increasing – this is where the amount the policy will pay out increases over the term of the policy based on inflation and the retail price index.
So you have decided how long you want to be covered for, how much you want to be covered for and the type of policy you need. Now you need to consider the type of monthly premiums you want.
What Monthly Premiums can I Use?
- Guaranteed – this is where your monthly premium will not change for the life of the policy providing no changes are made to the policy.
- Reviewable – this is where your policy will be reviewed at key times during the policy (for example every 5 years) and the cost of your monthly premium will be adjusted upon review so it could go up or down.
Another consideration is to decide if you want a waiver of premium added to your critical illness insurance policy. This addition will ensure your policy remains in place should you be unable to work due to an accident or illness as it will pay your monthly premiums on your behalf in this situation after a defined number of months. After all, if you stop paying your monthly premiums, it is likely your critical illness insurance will be cancelled by the provider and you will no longer be covered. Waiver of premium helps avoid this happening.
When it comes to critical illness insurance, each provider is different in the number of critical illness conditions they cover and the definition of the critical illness conditions used for claims. And if considering serious illness cover instead of critical illness cover, this changes again as these tend to cover a greater number of conditions and payout in stages. Still, you may receive less in the event of a claim than policies providing critical illness insurance.
Many insurance providers offer two levels of cover:
- Standard – provides cover against a ‘standard list’ of critical illness conditions
- Enhanced – usually provides cover against a larger number of critical illness conditions
What Else Do I Need to Consider?
If you want peace of mind that your critical illness cover is suitable for your individual needs, we recommend using critical illness insurance experts like us at The Mortgage Pride.
We have access to a wide number of insurance providers offering critical illness cover and individual, jargon–free protection advice tailored to your budget. We can also review existing policies for you as well, to give you the peace of mind that your current critical illness insurance or serious illness cover remains suitable for your needs.