No one wants to think about becoming seriously ill. Still, it’s something most of us should plan for, especially if we have families who depend on us and our income.
Any serious illness is likely to lead to time off work, which could see your finances take a big hit.
This is why many people take out critical illness cover with their life insurance, as it means they are also covered if they suffered a serious illness like cancer, heart attack or stroke.
Interested in finding out more about critical illness cover? Here are seven things worth knowing:
1 You get a payout on diagnosis
Critical illness insurance pays out a lump sum when you’re diagnosed with an illness set out in your policy. In most cases, it’ll be a one-off payment for you to use how you wish.
2 You might need the cover for work
If you become seriously ill and are unable to work, you may be able to receive state benefits or sick pay from your employer, but these will only last for a relatively short period of time, often a few months.
The lump sum paid out under a critical illness policy is there to make sure your finances don’t add to your concerns, as you focus on managing your condition and getting the help you need.
3 You can choose your level of critical illness cover
In some ways, critical illness is unique in the world of protection insurance. While life insurance is usually linked to your mortgage and living expenses, and income protection to your salary, with critical illness insurance you have free rein over how much cover you take out, whether that’s £50,000 or £500,000.
The amount will depend on what you imagine using the money for: you may wish to pay off some or all of your mortgage, cover medical and living expenses, or take your family on that once-in-a-lifetime trip, or any combination of the above. It is up to you.
4 Critical illness insurance covers more conditions than you think
When we think of critical illness, we tend to think of the major afflictions: cancer, heart attack and stroke (and indeed these account for the vast majority of claims).
But there are many other conditions that could result in long hospital stays and time off work, such as Parkinson’s disease, loss of speech and liver failure.
In fact, you can receive a tax-free payout if you are diagnosed with any one of about 40 conditions. The number of conditions may depend on the insurance company.
5 You can choose a single or joint policy
If both you and your partner are breadwinners in your household, it makes sense to take out a joint policy. Then, should one of you fall ill, it’d mean that the other could look after you and raise your family without worrying about money.
6 You can protect your children too
If you’re a parent, protecting your children whether they’re big or small is your top priority.
Unfortunately, you can’t wrap them in cotton wool (or getting them in and out of the car would be difficult). You can, however, add them to your life insurance and critical illness policy.
Doing so means you would receive a payout if they were diagnosed with one of the illnesses on your policy. How much you would receive, and at which age you can add your children, will depend on the insurer.
7 You decide how long the critical illness policy should last
Anyone can become critically ill at any time, but you can set an end date on your critical illness policy.
For instance, you may wish to set an end date to tie in with the year your mortgage will be paid off, or when your youngest child turns 18 and potentially becomes more financially independent.
Find out more about Zurich life insurance and critical illness cover