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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.
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 change in health, support family, access private medical care or pay for essential modifications to be made to one’s 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.
Policies also generally include total permanent disability (TPD) as standard. This would allow the insured to claim the full policy benefit in the event of suffering a debilitating injury. However, caution should be exercised here because the ability to claim can range from an incident causing an inability to do your “own occupation” to an inability to do “any occupation”.
Additionally, often the policy automatically includes Life Insurance and Terminal Illness Insurance 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.
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 when it is needed and going for a budget option may not be fit for purpose.