Critical Illness Cover Explained

Written By: Vern Eaton on February 10, 2010 No Comment

Critical illness cover is a type of insurance policy that will pay out a sum to the policyholder if they are diagnosed with a specific critical illness. Most insurers will include the following illnesses with a critical policy: cancer, stroke, and heart attack.

Your insurance provider will have specific definitions of each of these policies, and the illnesses that will need to be met in order to be considered ill by their standards. These requirements will need to be met in order to receive your money.

Each provider will have a different list of illnesses that they cover besides cancer, heart attack and stroke (which are covered on every policy). It’s important to know that your life insurance adviser is able to explain these details to you so that you know you are being covered for the right things.

The Association of British Insurers (ABI) has created a list of specific definitions that insurance companies must use as a model for critical illnesses. There are 23 definitions that they use for their ‘Statement of Best Practice’ regarding critical illness cover in the United Kingdom.

Illnesses that are included in this document include loss of speech, paralysis of limbs, a major organ transplant, traumatic head injury, and things like coronary artery by-pass. Some of the illnesses will have specific requirements like “burns to the body”, which “must cover at least 20% of your body’s surface.” One of the other examples is HIV infection. To be considered you need to have caught HIV from a blood transfusion or a physical attack while living in the United Kingdom.

The Key Facts Document can be obtained by most life insurance brokers or by going online to different insurance provider’s websites. This information explains the illnesses covered in a clear and concise way. With many of these policies, total permanent disability cover will be included as an bonus feature.

A lot of UK residents choose to purchase critical illness cover for their children, which would pay out at around 25% of the policies sum assured. These children’s policies are usually capped at a certain amount though.

Some critical illness cover policies will include a waiver of premium that covers the payments if the policy owner falls ill and is not able to work. Usually this is an additional premium to your regular policy.

All of the policies will have certain exclusions that will void your policy so make sure you are aware of these. This could include things like unreasonable failure to follow medical advice, war, drug abuse, and flying among other things.
Different insurers will have different definitions of their exclusions so if you partake in something like a hazardous sport or pastime you’ll want to understand the risks of your policy.

Before you sign a policy you should make sure that you know the risks because exclusion could mean that you receive nothing – and for that reason there may be no point in purchasing insurance in the first place. Speaking to a knowledgeable adviser should solve that problem though.

You can usually bundle your insurance products together to save money. So a normal package would include life insurance cover, Permanent Health Insurance, and Critical illness cover. All of these things might not be necessary for your specific needs but a lot of people would rather be safe than sorry.

Looking to find out about the conditions of critical illness cover, then visit www.criticalillnesscover.org.uk to find the best advice on the illness covered.

categories: critical illness insurance, life insurance, life cover, money, finance