In this article
If you’re considering taking out Life Insurance or reviewing your existing policy, you may be wondering whether you need Critical Illness Cover.
This type of insurance provides a lump sum payout if you are diagnosed with a serious illness that is covered by the policy.
In this article, we’ll take a closer look at this type of insurance and help you determine whether it’s something that could be right for you.
Critical Illness Cover
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What is Critical Illness Cover?
Critical Illness Cover is a type of insurance that pays out a lump sum if you are diagnosed with a serious illness that is covered by the policy.
The amount of the payout will depend on the level of cover you have and the severity of your illness. Some policies also offer partial payouts for less severe illnesses.
The illnesses covered vary between providers, but typically include conditions such as cancer, heart attack, stroke, and multiple sclerosis.
Some policies may also cover other conditions such as Parkinson’s disease, kidney failure, and major organ transplants.
Do I Need Critical Illness Cover?
The decision to take out Critical Illness Cover will depend on your individual circumstances and priorities. Here are some factors to consider:
- Your Health: If you have a pre-existing medical condition, or if you have a family history of serious illnesses, you may want to consider Critical Illness Cover to provide financial support if you were to become seriously ill.
It is important to note, however, that some providers may exclude an illness, that you have previously had or that could be hereditary. You’ll need to discuss this with your advisor, as it is taken on a case by case basis. - Your Lifestyle: If you have a high-stress job, smoke or drink heavily, or have a poor diet, you may be at higher risk of developing a serious illness. In these cases, Critical Illness Cover could provide peace of mind and financial protection.
Your lifestyle will be taken into account when it comes to what is covered and your monthly premium. - Your Financial Situation: If you were to become seriously ill and were unable to work, could you cover your bills and expenses? If not, Critical Illness Cover may be a good investment.
- Your Existing Insurance: If you already have Life Insurance, it’s worth checking whether Critical Illness is included in your policy. If not, you may want to consider adding it as an extra.
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Benefits of Critical Illness Cover
There are several benefits to taking out this type of cover:
- Peace of Mind: Knowing that you have financial protection in place in case of a serious illness can provide peace of mind and reduce stress.
- Financial Support: The lump sum payout provided by Critical Illness Cover can help cover medical bills, living expenses, and other costs associated with a serious illness.
- Flexibility: The payout from a critical illness policy can be used in any way you choose. You could use it to pay for private medical treatment, pay off your mortgage, or make lifestyle changes to support your recovery.
Potential Drawbacks
As with any type of insurance, there are some potential drawbacks to consider when taking out Critical Illness Cover:
- Cost: Critical Illness Cover can be more expensive than standard Life Insurance, especially if you have pre-existing medical conditions or a family history of serious illnesses.
- Coverage Limitations: The illnesses covered vary between providers, and some policies may have exclusions or limitations. It’s important to read the policy documents carefully to understand what is covered and what isn’t.
- Waiting Periods: Some policies may have a waiting period before you can make a claim. It’s important to be aware of any waiting periods and ensure that you have sufficient savings to cover your expenses during this time.
Alternatives to Critical Illness Cover
If you’re not sure whether Critical Illness Cover is the right choice for you, there are some alternatives to consider:
- Income Protection Insurance: This type of insurance provides a regular income if you are unable to work due to illness or injury.
- Savings: Building up an emergency fund or savings pot can provide financial protection in case of a serious illness. That said, the amount that could payout from appropriate insurances, could likely outweigh what you would be able to save, in most cases.
- Government Benefits: If you are unable to work due to illness, you may be eligible for government benefits such as Statutory Sick Pay or Employment and Support Allowance.
How UK Moneyman Can Help
If you’re still unsure about whether this is the right type of cover for you, it’s a good idea to seek insurance advice from a professional protection advisor.
At UK Moneyman, we can provide our customers with expert insurance advice on a range of insurance products, including Critical Illness Cover.
Our protection advisors can help you understand the benefits and drawbacks of different policies and help you choose the right level of cover to suit your individual circumstances.
We can also provide insurance advice on other types of insurance, such as Life Insurance, Income Protection, and Family Income Benefit.
By reviewing your existing policies or recommending new ones, we can help ensure that you have the financial protection you need in case of unexpected events.
In addition to insurance advice, our protection advisors can also provide mortgage advice, including buy to let mortgages, remortgages, and first time buyer mortgages, to name a few.
We can help you understand the different options available and find the best mortgage deal to suit your needs.
In conclusion, whether or not you need Critical Illness Cover will depend on your individual circumstances and priorities.
If you have a pre-existing medical condition, a high-stress job, or are concerned about your financial situation in case of a serious illness, it could be worth looking at this as a potential option for you.
That being said, it’s important to carefully consider the potential benefits and drawbacks of the policy, as well as any alternatives.
At UK Moneyman, we can help you navigate the complex world of insurance and find the right protection for your needs.
