Critical illness cover has some similarities to life assurance, the big difference being that it becomes payable if you’re unlucky enough to be diagnosed with one of the illnesses mentioned on your insurance policy. This is usually given as a one-off, tax- free lump sum designed to pay off your mortgage and cover any other expenses you may incur. Like life assurance, it’s a must-have if your family depends on your income to keep a roof over their heads and maintain a reasonable standard of living.
Unlike life assurance, it’s not only about dependents. If you’re diagnosed with an illness serious enough to prevent you from working, you’ll need to cover your own living expenses: for most working people, state benefits only go part of the way towards this. So if you haven’t got a reasonable amount of savings or sickness benefits through your job, critical illness cover is something you should consider.
Critical illness cover usually pays out only if you’re diagnosed with one of the illnesses specified on your policy, and if your condition is serious enough. Illnesses covered tend to be chronic conditions such as multiple sclerosis, or cancer which has advanced beyond a particular stage. Unless you have a policy which gives life assurance and critical illness cover, no money will be payable if you die.
If you suffer from any chronic or ongoing health conditions when you take out your policy, it’s unlikely that serious illnesses related to these will be covered, either. So although critical illness cover can be appropriate in certain situations, it isn’t suitable for everybody. That’s why our expert advisers always get to know your circumstances and future plans and will only recommend the kind of cover that’s exactly right for you.
*For insurance business we offer products from a choice of insurers.