What is Critical Illness
Critical illness insurance is a long term insurance plan, designed to ease any financial pressure by paying out a tax-free lump sum if you are diagnosed with a serious illness or become totally disabled. For the policy to pay, you must survive for at least one month after becoming critically ill.
The range of diseases/illnesses has increased to more than 30, but policies may differ between providers. All policies should cover seven core conditions, which are cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. Depending on the provider you choose, a policy may also pay out if you become permanently disabled as a result of injury or illness.
Due to medical advances over the years, providers have introduced more restrictive rules for heart attacks. For a claim to be successful that has to be evidence of chest pains or changes in the electrocardiogram (ECG). It is important to note that some cardiac conditions such as Angina are not covered.
Insurance providers will provide you with a policy summary, which will set out a list of illnesses covered. However this is only a guide, with the Policy document setting out the criteria that must be met before your provider would pay you your claim.
Am I eligible for Critical Illness Insurance
• Normally most providers will allow you to take out cover if you are between the ages of 17 to 70. A Critical Illness policy can be taken out that coincides with the length of your mortgage or you for as long as you choose. If you decide to take out critical illness cover it is important to note that most providers may impose a waiting period of 3 months before you may make a claim.
• If you decide to apply for cover you will be asked if you or your family have suffered in the past. If you or members have suffered from illness in the past, your premiums that you will pay may be higher as you will be rated. If you need to make a claim on your policy it is essential that you are honest about your family history, failure to do so may result in your claim being rejected.
It is important that you understand what the policy covers, and when it will pay out and when it may not.
What to look out for
Looking for the right cover can be a tricky process, with the wide variety of policies available on the market. It is advisable not to go for the cheapest option in the first instance, as these policies will probably offer limited cover.
Below is our 4-point guide for finding the right cover?
1) Make sure you read the small print, so you aware of the agreement you are entering into and making sure you know what is covered and what may not.
2) Check with your provider if your premiums will be guaranteed (fixed), or increased with the insurance company reviewing your policy every few years.
3) Make sure you are given a Key Facts document, which will provide you with the illnesses that are covered and the ones that are not
4) Many providers are now starting to cover children on their standard policies.
If you require more information and help with choosing the right Critical Illness plan, one of our trained advisers will be happy to help – Call 0800 328 5773.