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Critical Illness cover
Critical Illness Insurance provides a tax-free lump sum on diagnosis of a specified medical condition. It is worth considering including this product as part of your income protection strategy if you and or your loved ones would be impacted by the loss of your income if you were unable to work.
The most common conditions claimed for are cancer, heart attack, multiple sclerosis, stroke and brain tumour, however policies covers many other conditions and illnesses.
What do critical illness policies cover?
The product is designed to help cover the immediate and ongoing costs of having a serious illness. It will help support your family at a time of need and could help access private medical care or pay for essential modifications to be made to your home.
Common home modifications include stair lifts, ramps and toilet facilities on the ground floor when mobility has been impacted after a stoke for example. Having the funds available to make these kinds of modifications can prevent the need to move home away from friends and family and the potential of losing their support when it is needed most.
Critical illness insurance pays out a tax-free payment if you get one of the specific medical conditions within the policy. Most policies generally include total permanent disability as a result of an injury or illness as standard. This would allow you to claim the full policy benefit in the event of suffering a debilitating injury.
Policies may include Life Insurance and Terminal Illness Insurance cover at no extra cost. However, should a critical illness claim be paid the policy would cease and therefore no further pay-out would be available after that.
How to choose a critical illness policy
The Critical Illness Insurance market is highly competitive and as a result providers are continually reviewing and updating their products in an attempt to be the most comprehensive offering on the market. It is always good practice to review your policy periodically because the improvements providers make generally increase the opportunity to claim.
In addition, because every provider has their own claim conditions it is important not to base a decision solely on price. Cheaper policies often have far stricter claims criteria to fulfil. The purpose of the policy is to provide a cash lump sum when it is needed most and going for a budget option may not be fit for purpose.