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critical illness |
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Critical illness cover bridges the gap left by life assurance, which only pays out if you die. These days, people are surviving illnesses that were once fatal such as cancer, heart attack or a stroke. Having survived, many people are unable to return to work or find that they have to pay for special medical care.
When you survive a serious illness but you are not well enough to earn your living, you will still have to pay the mortgage, household bills, motoring expenses, and for enjoying yourself. In fact, your costs of living may increase because you may need some sort of nursing care.
Critical Illness insurance gives you a lump sum of cash if you contract a serious illness or suffer a debilitating affliction, which will help meet these costs. The cash is paid tax-free.
There has been much publicity about Critical Illness policies failing to honour claims. Often these are due to the definition of what constitutes the policyholder’s occupation. We strongly advise the use of ‘Own Occupation’ clauses in policies, which should ensure that a claim will be valid if the policyholder is unable to perform his/her current occupation.
The average age of male claims for Critical Illness is 49 years and just 43 years for females (source: Swiss Life). Cancer is the cause of more than 50% of al claims.
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If you are fortunate enough to recover from a serious illness through medication or operation and can return to work, you do not have to repay any part of the sum paid out.
You can take out separate policies for both life cover and critical illness. Alternatively, you can take out a combined policy. This will have the benefit of lower cost BUT it will only cover you for life OR critical illness. Likewise, couples can usually take out a joint policy for less cost than two individual policies but this will only provide cover against the first claim.
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