What is a critical illness?
Critical illness cover is a type of insurance that pays out a lump sum if you are diagnosed with a critical illness. “Critical illness” here refers to a serious or life-threatening disease. This is sometimes also called ‘specified illness’ cover as the policy will describe the specific illnesses it covers.
You may be able to claim on this policy for any number of conditions, including:
- Kidney failure
- Heart attack
- Coronary artery bypass surgery
- Cancer or tumors
How does the cover work?
So, what is Critical Illness Cover?
In layman’s terms, it’s an insurance policy that pays out a lump sum if you’re diagnosed with one of the conditions covered by your policy.
Who can claim?
Anyone who has a valid and active Critical Illness Cover policy can make a claim. You don’t have to be working or employed when you take out the policy or at the time of diagnosis to be eligible for a payout. You also don’t need to be registered with a GP or be undergoing treatment at the time of diagnosis in order for your claim to be valid.
How do I make a claim?
Making a claim is simple enough: just contact your insurance provider direct when you’ve received confirmation from your doctor that you have one of their qualifying illnesses. However, there are some specific requirements and checks that vary between companies which we’ll run through below.
What if I am unable to work?
If you are unable to work because you are suffering from cancer or some other serious illness, then chances are you might need help to pay your bills.
A serious illness like cancer can have a huge impact on your life and means that in the long term, you may need to make major adjustments. You may need to take time off work for treatment, modify your lifestyle and change the way you live. If this happens due to a critical illness or injury, it is likely that your income will decrease while your expenses increase.
Hence, critical illness cover could be an ideal solution. It pays out a tax-free lump sum if you are diagnosed with one of the illnesses covered by the policy terms and conditions. This payout can be used however you wish whether it’s paying off debts, covering mortgage costs or adapting your home or car if needed.
How much critical illness cover do I need?
Before you take out critical illness cover insurance, it’s important to understand how much you need and your monthly payment options.
How much critical illness cover do I need?
Your monthly premiums will be based on the amount of cover you obtain. The higher the coverage, the higher your monthly payments will be. However, the amount of coverage will depend on a few factors:
- cost of medical treatment
- loss of income
- mortgage/rental payments
- other debts
- cost of lifestyle changes, such as adapting your home
- cost of childcare
- funeral costs
- other financial commitments
- future costs (e.g., inflation)
- cost of other insurance policies
What’s not covered by critical illness cover?
There are exclusions to critical illness cover, including:
- Any conditions not specifically listed in the policy document.
- If a member is diagnosed with a condition but does not meet the definition of ‘critical illness’ included in their policy document.
- If a critical illness occurs as a result of a pre-existing condition that was known about at the time you took out your policy.
- If the person insured is not an ordinarily resident in the UK for more than six months of the year.
- If you have already claimed on your policy and it has paid out
Can I still get critical illness insurance if I have a pre-existing medical condition?
You can get critical illness insurance even if you have a pre-existing medical condition. You don’t need to be in perfect health to qualify for life insurance, and the same goes for critical illness cover. However, it’s worth noting that your insurer will likely want to know about any pre-existing conditions when they’re determining your coverage options—and how much it’ll cost you.
As a rule, most insurers will ask you a series of questions about your health history when you apply for critical illness cover. These questions are meant to determine which conditions will be covered by the plan (and which ones won’t). Answering these questions honestly is in your best interest; providing inaccurate information could result in the insurer canceling your policy or denying benefits down the road.
The good news is that many insurers offer critical illness coverage for policyholders with chronic or pre-existing conditions, so long as these conditions aren’t excluded from the policy. A few common exclusions include alcoholism and drug abuse (which are never covered), and self-inflicted or intentional injuries (like suicide attempts).
Is there a waiting period before I can claim on my critical illness insurance policy?
There will be no waiting period before you can claim on your critical illness insurance policy if it is a new condition.
However, there may be a waiting period for any pre-existing conditions that you have or for specific conditions such as cancer. There will also be a waiting period for claims related to pregnancy (usually three months).
To protect yourself, your family and your business, you should consider getting critical illness insurance.
Why should you get Critical Illness Insurance?
Critical illness insurance is an important part of your overall financial protection plan. It helps protect your family by helping to pay for the things that are important to you if you are diagnosed with a critical illness, such as cancer, a stroke or heart attack.
This coverage can be especially relevant if you have children or other dependents, a mortgage or other debts. If you were to suffer from a critical illness and were unable to work because of it, this coverage may help replace some of your income so that when you get better, you can return to work instead of worrying about the bills piling up on your kitchen table.
If something ever happened to you (God forbid), what would happen to your family? Would they be able to stay in their home? Would they be able to afford their child’s education? Is there enough money saved for retirement or would some of it need to go toward meeting those needs first?
Critical illness insurance can help give both financial and emotional comfort at what would already be an incredibly difficult time in your life.