What is Critical illness insurance cover? do I need it?
Chris Clare
As part of your overall financial planning it may be of benefit to consider the option of critical illness insurance cover, what it entails, and whether it would be important with regards to your family and loved ones future financial peace of mind.
The subject of life insurance is common knowledge and indeed many people are aware of its importance with regard to their personal financial planning, especially if they have a loan or mortgage policy to insure. But the problem is that far fewer are aware of critical illness cover and its importance with regards to their personal financial planning.
The thing about critical life insurance is that it is possible to add it to a policy as additional insurance or it can be used independently as a policy in it's own right. A critical illness insurance policy is one that will cover the policy holder in the event of they're contracting one of a number of major illnesses previously stipulated in the policy. Among those critical illnesses covered there is cancer, major organ transplant, stroke, heart attack, to name just a few.
The important thing about this type of insurance is the fact that payout is not dictated by any outcome of the condition. It is purely dictated by the fact that you suffered the condition in the first place. This means that should one of the worst things actually happen such as you suffering a heart attack, then the benefit will pay out and this is regardless of the fact that you may make a full recovery, which is something that does happen quite frequently nowadays, especially with modern day medical advancements.
Not a bad sort of policy to have. As we have said, the policy could function alone or as an addition to an existing life insurance policy, but you need to know which sort of plan it can be added to. Basically, it can be added to level term insurance, whole of life insurance and it can be added to mortgage protection.
It is with mortgage life insurance and protection that critical illness cover is the most beneficial. When taking out your mortgage you will probably have already considered arranging for the mortgage to be paid off should you die, but what if you suffer a heart attack or severe stroke and don't die but are rendered incapable of earning for several months? By taking out critical illness cover, you will have taken care of this possibility. The policy will pay for any ongoing debts such as mortgage repayments and loans leaving you able to convalesce and recover with no unpleasant monetary worries to impede you.
As an addition to mortgage life insurance, critical life insurance can sometimes be viewed as a luxury, with that money being put to better use in the here and now. As long as you have some coverage then your bases are covered, right? And that's the pity because if people actually knew how beneficial a critical life policy would be to their future financial security then they would be more willing to at least enquire about it and then would most probably invest in one for the future.
In conclusion, critical illness is a much more useful form of cover than you think. Some people consider it better even than life insurance as you can get to see the benefits of it without having to die. This type of cover is definitely recommended with mortgages and loans, but at the end of the day only you can decide if critical illness is what you think you need or can afford. The best plan of action is to speak with your financial advisor to discuss your options so that you have the right sort of cover and level of protection for you.
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