Critical illness cover – for peace of mind when you need it

What is a ‘critical illness’?

Critical illness largely covers conditions that are usually long-term and very serious. This might include: certain types of cancers; multiple sclerosis (MS); stroke; Parkinson’s disease; Alzheimer’s disease; traumatic head injury; heart attack; and a major organ transplant. There are numerous risk factors that contribute to the development of a critical illness, such as your age, genetics or lifestyle habits like diet and smoking.

The majority, if not all of these conditions can prevent an individual from working. We’re currently living in a time of great financial crisis, due to the cost-of-living crisis and inflation rises. With so many people already struggling, the last thing anyone needs is to worry about their finances if they suddenly fall critically ill.

However, by taking out critical illness cover, you are supported in the event of a critical condition that prevents you from working. What is critical illness cover and what does it include?

What you need to know

Essentially, critical illness cover means should you become critically ill, you will receive a tax-free lump sum, which can be spent however you wish. For instance, you may wish to pay off your mortgage, provide for dependants, simply cover day-to-day costs or pay for medical expenses: there isn’t anything in particular that you must spend it on. Like any sort of insurance cover, there is much to consider when ascertaining if critical illness cover is right for you and choosing a provider.

For example, income protection is another type of insurance that offers financial peace of mind should you fall ill, but with different tenets. Income protection provides you with regular income should you be unable to work, and will continue paying this income until you return to work, retire or pass away. While income protection usually covers a wider scope of illnesses, it’s generally the more expensive of the two. It’s worth bearing in mind that should you not survive a certain number of days following a diagnosis (varies between providers), you won’t receive a pay-out from critical illness or income protection insurance – this sort of payment is covered by life insurance only. Most critical illness providers will also only pay out once.

Of course, there are always stipulations with insurance, and critical illness cover is no different. When choosing a provider, you must be meticulous when looking at what is and isn’t included.

The low-down on your cover

Initially, determine if you actually need critical illness cover. You may not if: you have sufficient savings to cover any expenses like your bills, rent or mortgage; if you don’t have a mortgage or dependants; you can depend on a partner or family member to support you; or if your employer provides you with cover, as part of an employee benefits scheme, for example. If this doesn’t apply to you, there is some information you’ll need to know about taking out critical illness cover.

Firstly, there will be certain illnesses or conditions that aren’t covered, so be sure to check. For example, some providers may not offer a pay-out if an individual has cancer that hasn’t reached a certain level of severity. Likewise, other providers won’t cover injuries or illness that have occurred directly or are related to: self-inflicted injuries; not following medical advice; criminal activities; and alcohol or drug abuse. You may find that other factors like your age, lifestyle and existing health issues influence the policy and the amount that is paid out to you. Following on from the aforementioned point, cost is another factor that may sway your decision-making. Monthly payments will vary between providers and might also be based on your occupation or health-related factors like weight, current health status, family medical history, and age. Be sure to scrutinise the particulars of the provider’s cover before making a final decision.

Cover for when you need it most

The prospect of becoming critically ill is not a pleasant one to ponder, but it’s important to have protection in place should this event occur. Seek the advice from an Independent Financial Adviser, like money4dentists. The team will ensure you choose the most suitable and affordable policy for your individual situation. This way, you can receive the much-needed peace of mind that should you become critically ill, you and any dependents you may have will be adequately supported during this time.