Things everyone should bear in mind before taking out a critical illness cover!
Critical illness cover as most of us already know is about 5 – 6 times more expensive as compared to a simple life cover. And the only reason why it’s so dear is because you’re much more likely to suffer from things like cancer, heart attack, stroke, etc. than you’re to die before you reach (let’s say) 65.
A Critical illness cover would normally cover you for over 40 – 60 serious/ critical illnesses (depending upon which provider you choose to go with). You’re usually able to survive these conditions but could obviously take time to recover completely from it depending upon the severity of the condition. So for the time you’re off sick & are not able to continue working due to that particular illness, you get a lump sum that could help you and your family to carry on living the same way & enjoy the same lifestyle until you’re fit to work again.
It’s highly recommended for those who’re the only working members in their families; it’s definitely one of the most important covers they should consider when planning family protection.
A few salient features one should know about the critical illness cover & how it works:
- It only pays out once and ends once the claim has been made.
- Critical illness cover gets dearer as you grow older so the early you get it in your life the cheaper it would be for you.
- Every provider has their own list of conditions that they would cover so when it comes to critical illness cover it’s not as simple & straight forward as a life cover & it’s important that you get a proper advice from an expert regarding different types of illness covers available in the market before randomly choosing any provider.
- Different providers would by and large charge differently for the same amount of cover, so don’t just focus on the which one’s coming out to be the cheapest, it’s important to make sure your policy pays out for most amount of conditions
- You can’t get a critical illness cover once you’ve suffered a critical illness already, regardless of how healthy you are now. So it’s better to take it out when you’re young and healthy.
There’s a lot of misunderstanding & mistrust around critical illness covers available today in the market. Much of it is to do with some cases that have gone bad in the past owing to how some of these big providers used to pay in case of a claim. Back in the day (until about 2 – 3 years ago) & even now some companies don’t pay out upon diagnosis of a critical illness as it is more around the severity of the condition. It would generally not cover every type of illness and for the illness they would cover, you’d usually need to be extremely ill or totally disabled before you could make a claim For e.g. in case of cancer, the way it used to work with most companies earlier (and even now with some companies) was, unless it would spread to another part of your body it wouldn’t be classed as critical and you would therefore not get a claim; there’re many more of such examples that unfortunately brought about a bad name to companies across the market offering these kind of covers. Luckily things have changed dramatically over the past couple of years with the involvement of FCA (financial conduct authority) who have cracked down on unscrupulous brokers & have ensured that all companies/ brokers giving any advice to consumers on financial products like these are compliant with their stringent laws failing which their licenses could be revoked. So these days’ financial advisers & brokers who work on advised basis are not only authorized & regulated by the FCA but their advice to you has to go through a 3rd party compliance to ensure you get the best advice.
All you need to do as a customer is to make sure the company you’re dealing with is FCA regulated.
Who must consider a critical illness cover?
- single parents with dependent kids
- Main working member of a family
- Someone who doesn’t have savings or anything to fall back upon in the event he or she
The cost of the cover depends upon the age. The older you get, the more you will have to pay because the risk of you getting ill increases. Your job & lifestyle also have an impact on the premiums when it comes to a critical illness cover. For e.g. If you’re in a dangerous job, working at heights, lifting heavy weights or were into adventurous sports like mountain climbing, diving, motor bike racing, etc. you’d end up paying more as compared to someone who’s not involved in any of these things.
As per the statistics 1 in 2 people in the UK have already or will have cancer once in their lifetime; that’s a rather shocking revelation, isn’t it. A total 338,623 no. of new cases of cancer were recorded in 2012 in the United Kingdom. Every year around 43% of the working population in the United Kingdom find themselves unable to work because of injury and illness.
If we were to go by these findings which are quite shocking to say the least, it would make sense to take notice & make preparations before it gets too late.