What counts as Critical?

Summary

The things you should mull over when deciding on critical illness cover and the rangeof companies proffering thisstyle of policy.

Your mortgage provider may offer you several financial products including critical illness cover. But, as they are not experts in this field, you will most likely find a superior offer elsewhere.

The level of cover on offer is just as important as the premium when looking forcritical illness cover. The policies from Nationwide and Alliance and Leicester are particularly limited according to an adviser at Money Supermarket, an online and telephone life assurance broker. Legal and General covers only seven critical illnesses, with Friend Provident covering just 9, whereas the market leader, Swiss Life, covers 39.

Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the illnesses not covered by some of the Insurance companies. The Directorsays that it is not worth consideringa policy, which insures less than 25 conditions.

An umbrella term included in all policies is ‘total and permanent disabilities’, this term means you are covered for any condition, which prevents you from working permanently.

You neeed to be aware of the wording as some policies cover ‘any occupation’ whereas other policies only cover your ‘own’ occupation. You will not receive a payout under a ‘any occupation’ policy unless you are absolutelyunable to carryout a job, however unskilled. Therefore The senior adviserrecommends you sign up for a ‘own’ occupation policy.

There are a range of companies as well as Aviva who offer full insurance including Standard  Life, Norwich Union, Liverpool Victoria, Scottish Provident, Scandia, Zurich Life, Friends Provident, Scottish Equitable and Legal and General..

In the past Life Insurance   has been promoted by mortgage companies. This has resulted in critical illness cover never being considered by many people. There are 4 times as many claims on critical illness policies compared to life insurance, when the consumer has taken out both types of insurance.

Life insurance cover is extremely important, particulary if you have family, as they will welcome the lump sum settlement on your death. However critical illness cover ought to be the priority if you have debts to settle, particularly a home owner loan. The adviserbelieves critical illness to be essential as it covers the cost of your household bills, even if you are sick and unable to work.

The monthly payments will be higher if you are a smoker and will also be more expensive if you are older. A decreasing term policy, which is targeted at people only wanting to insure the cost of their mortgage, is the cheapest.

One of Spencer Knight’s customers, a 26 year old non-smoker, who wanted150,000 pounds cover from a critical illness, long term policy, was given a price of 14 pounds 40 pence per month, which rose to 25 pounds 50 pence for smokers. However a Directorfrom LifeSearch suggested a policy, which gave both life insurance and critical illness cover for seventeen pounds eighty pence a month, so it would be well worth paying a slightly higher premium.