Serious Illness cover

Serious ilness cover

What is it?

Critical illness cover is a long-term insurance policy designed to pay a tax free lump sum on the diagnosis of you having suffered from one of the long list of illnesses (but not necessarily fatal) conditions such as a heart attack, stroke, cancer, multiple sclerosis permanent disability and loss of limbs. The illnesses covered under these policies differ between the various Life Insurance Companies and it is therefore important to seek independent advice, but in the main they all cover the main categories.

Why do people buy this cover?

Many people buy SI cover when they take on a major commitment such as a mortgage or where they feel that their standard of living could be seriously effected in the event of suffering from a serious illness.

What are the main features?

Before you take out cover you should consider the following:

  • Critical illness cover pays you a lump sum if you are diagnosed as suffering from one of the specified illnesses.
  • Policy summaries will often set out a list of illnesses covered, but this is only a guide and full details will be in the policy document. As there are so many illnesses covered we will be happy to provide you with a typical list.
  • Suffering from a covered illness may or may not affect your ability to work and as such there is no stipulation that you need to be out of work in order for a claim to be paid.
  • Un like life insurance cover serious illness cover is paid out whilst you are still alive and as such Most insurers exclude all pre-existing conditions but others will decide on the basis of your personal medical history.
  • Serious illness cover differs to other types of protection insurance like income protection cover and it is important that you fully understand what it does and whether it is right for you. Income protection policies pay out an income to replace lost income in the event of you being unable to go to work as a result of an accident or prolonged ill health.

How much serious illness cover should I have ?

We usually recommend that a person looks to cover some if not all of their outstanding borrowings, however failing that one might consider implementing a sufficient amount of cover that would cover their outgoings for an 18-month period, however this differs from person to person.