UK Critical Illness Life Insurance

What is critical illness insurance cover?

A critical illness is a specified medical condition such as cancer which would stop a person receiving an income, and is unlikely to result in the person being able to work again. It is often known as 'dread disease'. Critical illness insurance cover will insure you should you suffer from any of these specified illnesses, and will pay out a lump sum, payable at the time of diagnosis.

You can take out a critical illness insurance policy in two ways. The first is as a 'stand alone' policy, taken out by itself. The second method is to add it to whole of life, term insurance or endowments policies. The reason why you may do this is that it offers you a way of getting hold of the value of your policy not just on death, but also on diagnosis of critical illness, which has the same effect as death on your ability to support your dependents.

A critical illness insurance policy sees you pay level premiums, the amount of which is determined by factors like your age, your family history (as most critical illnesses are hereditary), whether or not your smoke and the level or cover you require.

Perhaps the largest gap in the knowledge of someone taking out a critical illness policy is the conditions under which you are able to claim. It is actually quite simple. When you take out a critical illness policy, you must look out for the list of medical conditions covered by the policy. Whilst you may describe an illness as critical, if it is not on the list, you will not be covered for it on diagnosis.

It's not just the condition, it's the treatment as well. Insurance companies want to make sure that you are receiving the best treatment possible in order to try and get you better if at all possible. However, certain companies will not pay out any benefits should you choose certain treatments, such as laser treatment, that are not approved by the insurance company.

The lump sum that you receive is not taxable. However, the premiums that you pay into this policy will not be eligible for tax relief.

Those best suited to this cover are family men and women whose families may encounter financial problems should they not have an income. Single people who would not have anyone to care for them should they suffer from a debilitating condition would benefit from this cover to buy in help. Also, although your premiums would be higher, if you have a history in your family you would be advised to buy cover. Finally, key people in a business should be covered.

 

 

 

 

 

 

 

© AskFinancially.com 2008

Life Insurance

Ask About

> Life Insurance Advice
> What are the laws and regulations regarding life insurance in the United Kingdom?
> Who are the Financial Services Authority (FSA)
> Which life insurance products are not regulated?
> What are the types of life insurance policies available?
 > What is term insurance?
> What is Whole of Life insurance?
> What is the difference between term insurance and whole life assurance?
>What is critical illness insurance cover?
> What is Key Man or Key Person cover?
> What is Mortgage Protection Insurance?
> What do I do if I need to make a claim?
> Can I take out a UK life insurance policy if I am working abroad as an ex-patriate?
> Are the life insurance laws different in Scotland?
> Are the life insurance laws different in the EU?
 > What do I need to know about a Financial Advisor and whether they are qualified to give me professional advice?
> How do I find the cheapest life insurance for my requirements?
> Do some Insurance companies specialise in smokers?
> What are the advantages of taking out a joint life policy with ones spouse?
> How do I complain about a life insurance company?
> How do I complain about a Financial Advisor?
> How do I complain about Misleading advertising?
> How are my insurance premiums affected if I have medical problems?
> How does age effect my term assurance premiums?
> What does it mean when they say they are "loading" a policy?