Life Insurance with Critical Illness

> Life insurance with critical illness. Compare the whole life insurance and critical illness market at once and save up to 40%.

Buying life insurance with critical illness cover could be the best purchase you ever make. It costs a bit more than life insurance only, but brings with it a lot of extra protection. Have a read and find out if it is for you.

What is life insurance with critical illness cover?

As stated in our previous article, life insurance is a must-have purchase which will ensure that your family and loved ones will be looked after if you are not around to provide for them. However, as well as life insurance you have the opportunity to take out critical illness cover in conjunction with life cover.

Critical illness cover works in a similar way to life insurance: it is designed to ease the significant financial pressures by paying a tax-free lump sum if you became totally disabled or seriously ill. It is normal practice for the policy to pay out after you have survived the critical illness for one month.

What is covered?

The exact terms change from one policy to another, so be sure to read the small print and understand what is considered a serious illness and what is not. It is normal practice now for over 30 diseases to be covered under a critical illness policy. Seven core conditions are invariably covered: coronary artery bypass, heart attack, stroke, cancer, kidney failure, multiple sclerosis and major organ transplant. If the policyholder is permanently disabled as a consequence of illness or injury they would also be paid the lump sum. Importantly, not all conditions are covered which highlights again the need to read the small print and if you are comparing more than one critical illness plan that you are comparing apples to apples.

Not all cancers are now covered under critical illness, for example non-invasive skin cancers or less advanced cases of prostrate cancer. Similar restrictions exist for heart attack cover, where proof is required and certain cardiac conditions such as angina are not covered.

Main benefits

As well as the obvious peace of mind that such cover brings you will be much better prepared to adapt to very different personal circumstances. You will be in a position to continue to take care of your family and buy treatment and equipment that you may need. It’s horrible to think about but there are around 298,000 new cases of cancer alone each year and more than 1 in 3 people will develop some form of cancer during their life time (Cancer Research UK Statistics for 2007). Critical illness cover cannot help with the treatment but it can relieve the financial burdon at what would be a stressful time.

Main drawbacks

Life insurance with critical illness cover is more expensive than simply having life insurance, we recommend getting a quote first and seeing if the monthly premiums are affordable. As stated above you also have to be careful that you have appropriate cover and the illnesses that you want covered are covered.

Lump sum payment

You can use the tax-free lump sum payout in any way you want. It is normally used to pay off a mortgage or clear outstanding debt. Crucially, the lump sum payment gives you time to come to terms with your condition and get used to your new way of life and be able to make important decisions without the financial worries as well.

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