Critical illness insurance explained
There are certain events in life that make us ponder on the
things that are important specifically to us and it may be different
for each of us. On the one hand, the father with three children
may ponder heavily on how his loved ones would fare if he were
no longer able to work. Similarly he may question their future
if her were not in it at all, the same occurrence may be on
the mind of a 23 year old successful banker with the lifestyle
to match. While he may not have the dependants he may ponder
on how his lifestyle would be affected if he were suddenly unable
to work?
These ponderings usually lead the individual to look into the
protection offered by critical illness insurance. With so many
insurance companies on the market, each one having their own
portfolio of policies it is hard to decide which cover would
be the best for you. By taking the time to ruminate over certain
points you should have a better sense of direction when it comes
to choosing your insurance policy.
WHAT WILL CRITICAL ILLNESS COVER?
In the event that you are diagnosed with a critical illness
such as cancer the policy will usually pay out a lump sum that
is tax free which you can use to aid with any adaptations needed
or simply to pay the bills. Critical illness cover should not
be confused with private medical insurance which one can use
to pay the costs of medical treatment by a private doctor or
specialist. Similarly this form of insurance is different to
income protection insurance which will pay you a monthly amount
once you have been declared unfit for work for an agreed period
of time.
Different policies will offer cover for different illnesses
and it is important you are choosing a policy that gives you
the level of protection you want. All critical illness policies
cover ‘core' illnesses, these are cancer, stroke and heart attack.
Taking the time now to choose the right policy will ensure you
are not left in a vulnerable situation at the most inconvenient
time possible.
It is important to note that there is no universal list of ‘critical'
illnesses, each insurer will have their ‘core' list of illnesses
covered and usually a second list with ‘optional' additional
illnesses that can be considered critical enough for them to
pay out for. Most will pay out for a person undergoing coronary
artery by-pass surgery however not all would consider a heart
valve replacement or repair ‘critical'. With that in mind it
is vital to get all the things that you would consider ‘critical'
covered and not assume the provider's list will mirror your
expectations.
WHAT'S NOT COVERED?
Exclusions to the protection a policy offers will vary from
insurer to insurer and must be accounted for when selecting
your critical illness insurance. Some of the most common exclusions
include HIV/AIDS consequences of drug abuse and any self inflicted
injury. Similarly, if you fail to follow the medical advice
you have been given to aid your recovery from an injury or illness
and there are negative ‘critical' repercussions then the insurer
is unlikely to write you any cheques.
As the underwriters for your policy will have calculated risks
associated with you and your lifestyle based on life here in
the UK, moving abroad could invalidate your policy, leaving
you vulnerable. On the same vein, insurers appreciate that new
events in your life are likely to affect your risk factors and
are willing to accommodate. For example, if you have recently
had a child your priorities are likely to change and so too
your risk levels. Increasing your cover to keep up with the
current levels of inflation or because you have recently married
are acceptable reasons and are somewhat advised, it is important
to keep in mind that an increase in cover is likely to increase
the price of your premiums.