As opposed to life insurance that only pays out if you die during the term, critical illness insurance provides a lump-sum payment in the event that you are diagnosed with a critical illness during the insurance term. In reality, there is a much higher chance of your being diagnosed with a critical illness during a set period than there is of your dying. Critical illness insurance can be a good option to ensure your family is financially secure if you were unable to work for a long period.
Critical illness insurance premiums depend on a number of lifestyle factors, such as your age, sex, general health and whether or not you smoke. There are a wide range of critical illness insurance policies to choose from, with varying degrees of flexibility and level of cover. Basic critical illness insurance policies are generally available at much lower premiums, but do not provide the same level of protection as offered by more comprehensive cover; the more comprehensive critical illness insurance policies will cover a greater range of illnesses, and often include major surgery and permanent disability. This can be a good option, as critical illness may not necessarily halt your income, but may require alterations to be made to your house or car.
Some critical illness insurance providers offer payouts on a severity basis, which means that you may claim a percentage of your payout depending on the severity of your illness. Should your condition worsen at a later stage you are able to make further claims until the entire policy has paid out.
Critical illness insurance can be combined with a life insurance policy, which may be cheaper than paying separate premiums. Which ever policy type you opt for, you should ensure that any payout will enable you to pay off your mortgage or comfortably substitute your income if you are unable to work. The major benefit of a critical illness insurance policy is that it allows you to spend your payout during your lifetime, whereas life insurance provides for your dependents after your death. A combination of the two will give you financial peace of mind for however long you choose to be covered; usually the critical illness insurance policy term should coincide with your retirement or when your dependent children leave home or finish their studies.
To compare critical illness insurance policies complete the form on this page, and ensure that you are getting the best cover available for your budget.