This is why insuring yourself against ill health is something to be done while you’re physically fit and healthy, as critical illness cover is an insurance policy for you, but more importantly, it is a policy designed for your dependents.
In the event of a diagnosis of a critical illness, one of the worries you could be doing without is the thought: “how will I go about protecting my family’s income.”
The varieties of cover
When you are considering critical illness insurance, the type of insurance you choose obviously is dependent on your individual circumstances and needs and the amount of income protection you need.
The size of your outstanding mortgage and any major expenses such as the cost of children’s education and the earning potential of your partner.
There is a difference between critical illness cover and life insurance. A life insurance policy pays out a lump sum to your next of kin if you die, but critical illness cover will pay out if you contract one of a number of serious illnesses listed in the policy.
This means that the funds that are paid out can provide for a comfortable standard of living if you are forced to leave work due to ill health.
Some insurers will offer a combined policy that will offer both features. Others will offer a decreasing term mortgage protection policy alongside critical illness cover.
This means that if you take out a policy when you have 20 years left on your mortgage and you become critically ill a decade later, that your mortgage is paid off. Normally this policy will pay out for either a critical illness or a life insurance claim, not both.
Insurers are, by their very nature, risk averse. They prefer to back safe bets wherever possible, which means they will want to know extensive details about your health before they agree to cover.
Cover is generally offered to people who are in reasonable health and becomes progressively more expensive if the applicant does not have a healthy lifestyle.
Whilst some illnesses are hereditary, others are closely related to lifestyle factors. Therefore it is important (and not just for the insurance premiums), to follow doctor’s guidelines for a healthy lifestyle.
Smokers are likely to be charged high premiums, if they are accepted by critical illness cover providers at all.
Increasingly, people with weight problems face costly critical illness cover premiums, as more evidence comes to light about the relationship between obesity and conditions like diabetes, heart disease and cancer.
There is a wide array of policies on the market and finding one that caters for your individual needs can be quite a challenge.
If you would like some independent advice about what policy is right for you click here for further details.