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Which company offers the best critical illness cover?

Today, all the major insurance providers in the UK offer critical illness cover but how would you find out which one is the best for you?

Well the answer is not that simple. One of the biggest insurance providers i.e. Legal & General is trusted by the majority of people in the UK when it comes to life insurance for many reasons viz. they’re one of the oldest & the most heard of insurance companies in the UK, they also happen to be one of the most competitive insurance companies around but are they really that good when it comes to critical illness cover? Think about it if you’re looking to consider a CIC.

L&G covers you for just over 40 medical conditions which means, if you ever get diagnosed with something critical that’s not on their list you’ll never get paid even if you were to stop working & were off work for over 2 years. You could end up spending almost all of your savings for perhaps private treatment or to carry on living the same lifestyle but that wouldn’t necessarily mean that they would pay you, simply because they don’t cover that condition.

The same way, some companies would cover you for 50 conditions; some for over 80 & Vitality for e.g. would cover you for 114 conditions. But does that really make Vitality the best? Think again!

Vitality offers you serious illness cover which means if you were to get diagnosed with cancer for which all other providers would pay you the full lump sum that you’re covered for Vitality would only pay you a percentage of that amount depending upon the severity of your condition.

So just because a company covers you for more conditions doesn’t make it any better than others. There’re many factors that need to be considered before you decide which route you want to take.

AND for that very reason it’s highly recommended that you take professional advice from independent advisers/brokers to ensure they tailor make the cover based upon your budget and requirements.

Why is a critical illness cover more expensive than a simple life cover?

A life insurance or (should we rather call it) a death cover (as it only pays out on death unless you get diagnosed with something terminal) is designed to pay out a lump-sum (or a monthly income, depending upon your preference) to your family should you die during the term of the policy. So for e.g. if you took out a policy at the age of 40 for a 25 years term, that policy will only ever pay out if you die during those 25 years i.e. before your 65th birthday. Now come to think of it, it is after all only a contingency planning & ideally one shouldn’t expect any money out of it unless the worst was to happen. But then each one of us is different & all of us have a different outlook.

I can tell you there’re people who consider it only as a contingency planning but there’s now another emerging faction that believes in getting a return out of it. Honestly, I am one of them. End of the day, just like any other thing it is also a product I am paying for & if I can ensure that no one ever has to pay for my burials, I’d do it without giving it a second thought. In fact why only just the burials, like many others I’d love to leave money behind for my loved ones.

Hence I’ve done a death policy for myself that takes me to my 90th birthday & I know it’s highly likely that the policy will pay out given the small percentage of people who make it past that age. I know there’re people who go for Whole of Life policies too as that’s a guaranteed pay out. Trouble is, those policies are twice as expensive. But then I feel if you’re planning to go for a life cover, you should always choose between these two options because with them at least you know your family will get something at the end of the day & all that money you’d have paid in will not go down the drain after all.

Apart from death policy there’s one interesting policy which I feel has a long way to go still as over 80% of the people who take out a family protection cover, going by the statistics, only consider a simple life insurance, they don’t want to look beyond. It is what’s known as a critical illness cover. Now the biggest reason why many of us don’t go for it is because of the cost involved. It is usually about 5 – 6 times more expensive than a life cover & that’s because it has 5 to 6 times more chances of paying out. Most of them would cover you for all types of cancers & other conditions for e.g. hearts attack, stroke, MS, tumours, etc. & with cancer being so common these days, I feel one must have a critical illness cover in place. Now a lot of times people get confused between a terminal and a critical illness cover.

The biggest difference between the two is that, a critical illness cover pays out upon diagnosis of that condition, doesn’t matter how severe it is but with a terminal illness it has to be terminal i.e. the doctors should give it in writing that you only have a number of months left to survive. So that ways a critical illness cover is definitely of much more importance as compared to a life only cover.

Critical Illness Cover – Do We Really Need It?

Most people do not take life as an adventure which it is in a way because you never know what’s coming your way the next moment. Life comes with surprises, sometimes good & sometimes bad; we welcome the good ones wholeheartedly but what about the bad ones? Do you really think you are prepared for them? If not, critical illness cover prepares you for those bad surprises in that it helps you sail through situations like medical emergencies or serious/ critical illnesses that may or may not happen in future. But if you do ever get diagnosed with something serious it could very well have an impact on your lifestyle unless you have enough savings that could last you a few years or up until your retirement age.

Most of us don’t have that kind of saving in place & even if some of us do, aren’t these savings supposed to be used for things like holidays & fun, after all they’re savings. Instead of using up our savings for things like medical emergencies wouldn’t you rather someone else like “Legal & General” pay for your medical expenses & other bits & pieces because at the end of the day, you’re only going to pay them a little bit of money each month but what you get in return is almost 10 to 20 times more (depending upon age & other factors).

Now a days critical illness policy covers you for as many conditions as you can think of (actually a lot more than that), it gives you piece of mind that in the event something happens to you i.e. you get diagnosed with any critical condition God forbid, you would be paid a tax free lump sum and at least your family will not have to go through any financial crises at that time. The beauty of this product is that you’re not obliged to use that lump sum for medical issues only which means, if you were to get alright within a month & you still have 90% of that amount left intact, you can use it for anything you want.

What critical illness does not do for you is produce a regular income if you were unable to work due to a critical illness. For that you can consider an income protection cover.

How is life insurance different from critical illness cover?

Life insurance will pay you a lump sum if you die within the term of the policy but the chances that you would outlive the term of the policy or would get seriously ill or injured are always going to be more as compared to death during a certain given term. This is really what motivates most of us to go for a critical illness cover alongside life insurance. More than 95% of all critical illness policies sold in United Kingdom include life cover by default. The sooner you get it added on to your cover the better because the younger and fitter you are, the cheaper is the cover.

According to National Statistics research cancer survival rate in United Kingdom has increased by 80 per cent because of advancement in medical technology. So it’s Critical illness cover more than anything else that you’re going to need in times to come.

So get yourself prepared for the upcoming adventures of life. Get yourself a CRITICAL ILLNESS COVER today.

Things everyone should bear in mind before taking out a critical illness cover!

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:

  1. It only pays out once and ends once the claim has been made.
  2. 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.
  3. 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.
  4. 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
  5. 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?

  1. single parents with dependent kids
  2. Main working member of a family
  3. 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.