Critical Illness Insurance
NOT QUITE AS CERTAIN AS DEATH.....
...But in some cases even worse. If nobody wants to think about death you can bet your bottom dollar no-one want to think about serious illness. Sadly, a good number of us will have to. Try these statistics for size:
- 1 in 3 men aged 30 will have a stroke, cancer or heart attack before the age of 65, and the same fate will happen to 1 in 5 women of the same age.
- Breast cancer is the most common cancer in England and Wales. In 2000 there were almost 36,000 new cases diagnosed, 30 per cent of all cancers in women and a rate of 114 per 100,000 women.
- 1 in 3 people develop cancer sometime in life.
- Around 120,000 people have Parkinson's Disease and 1 in 7 are under 40 when diagnosed.
- Coronary Heart Disease is responsible for 12% of all working days lost through sickness.
- Each year, 120,000 people suffer strokes in the UK.
Cheery stuff I know, but the fact is that life goes on for many of those who suffer critical illnesses and our loved ones are likely to still need financial support, particularly if they are still young or financially dependent. Coming to terms with the loss of a loved one is bad enough, having them still around as a financial burden can put heavy strains or relationships, families and lifestyles.
Like life assurance, it is possible to insure against Critical Illnesses. Cover is payable on the conclusive diagnosis of a critical illness. Some of the conditions covered in most benefits include:
| Cancer | HIV Infection |
| Heart Attack | Kidney Failure |
| Stroke | Loss of Speech |
| Alzheimer's Disease | Loss of Hands or Feet (Limbs) |
| Aorta Graft Surgery | Major Organ Transplant |
| Benign Brain Tumour | Motor Neurone Disease |
| Blindness | Multiple Sclerosis |
| Coma | Paralysis of Limbs |
| Coronary Artery Bypass | Parkinsons Disease |
| Deafness | Terminal Illness |
| Heart Valve Replacement | Third Degree Burns |
| Traumatic Head Injury |
Also as with life assurance there are variations of the types of policy available and the most common are :
- Level term asssurance - designed to pay out a sum of money if the policyholder should contract a critical illness during the policy’s term. The sum assured is guaranteed and remains unchanged throughout the term.
- Decreasing term assurance (also known as mortgage protection cover) – where the sum decreases during the policy in line with the capital and interest repayments on a mortgage.
In general terms the cost of Critical illness cover is higher than life assurance (depending on age and medical history it can be 3 or 4 times more expensive), as it is more likely to pay out during the term. It is often cost effective to combine life and critical illness cover in the same plan.
Unlike life assurance, Critical Illness cover is particularly appropriate for those who have no dependants.
As with life assurance, the basic premise behind critical illness cover is simple, but there is more complexity in the detail, different levels of cover available, different definitions of the various conditions and so on. Very careful planning is required to ensure that you have the correct level and type of cover from this valuable product. If you need more advice contact The IFS Group
