Critical illness cover is an insurance policy that supports you financially if you are diagnosed with a severe illness.
When taking out the policy, it’s important that you mention any underlying medical conditions you have. The conditions you have disclosed may not be covered by the policy. Furthermore, if you have failed to mention the underlying medical condition, this could potentially mean your policy would be voided in the event of a claim.
The financial support will be from a lump sum of money that is a one-off payment to help pay your mortgage, medical, or if needed, modifications to your home.
The insurance will cover you in the event that you are diagnosed with a particular medical condition or injury that is stated within the policy.
It’s important that you read the policy thoroughly to understand which specific conditions are covered. This is due to the fact that the policy will not cover all instances of a certain illness.
It’s common for customers to confuse critical illness cover with life insurance. They are two insurances that can be purchased together, however, what they cover is very different.
The following that might not be covered within the policy could include more severe forms of cancer and other conditions. Health problems you knew you had before you took out the insurance will probably not be covered. Furthermore, this type of insurance doesn’t payout if you pass away.
What will and won’t be covered will be stated in the policy details therefore make sure you understand the policy and check all the documentation protects your needs.
Other types of insurance can provide support should something unfortunate happen to you. Below, are a list of some you might want to look into:
At Cardiffmoneyman, we offer all our customers a free, no-obligation protection review where we will look into any existing policies you have in place and check if they are appropriate for you. It’s important to know that insurance is massively beneficial.
Affordability is key when looking into insurance. That’s why a protection specialist in Cardiff, like ourselves, can provide you with the best cover that is suitable to your circumstances and priorities your budget and family.
Mortgage protection insurance is a term used to encompass various types of cover designed to protect borrowers like first time buyers in Cardiff from events that could severely impact their ability to maintain mortgage payments.
There are different variations, but when connected to a mortgage, they are all there to provide peace of mind and usually fall into the following categories:
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents aren’t left with a debt they might not otherwise be able to manage.
Our protection specialists in Cardiff can run through all the different types of life cover and recommend the most suitable plan for you.
Critical Illness Insurance works similarly to life insurance in that it is usually taken for a specific term of years and can have different options such as level/increasing.
It pays out a lump sum, and, like life cover, it is taken on a decreasing term basis in line with the reduction of your mortgage balance for borrowers.
The key is that the benefit is paid if you fall victim to one of several specified critical illnesses and pays out whatever the long-term prognosis of that illness. The type of illnesses covered vary from company to company.
That’s why this type of insurance cannot be solely price-driven and always recommended advice.
In practice, many companies will offer life and critical illness cover as a combined policy and would usually payout on the “first event”, i.e. whatever happens first – either death or a severe illness – the payout is made. They can also be written on a single or joint life basis.
Whereas life and Critical Illness cover pay out a lump sum, income protection pays out a monthly sum designed to replace your wages if you are unfit to work.
Unlike critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unfit to work.
However, there are restrictions on how much you can cover and how quickly benefits would start to be paid.
Like life and critical Illness cover, these policies are underwritten based on your health and lifestyle when you apply. All income protection policies are written on a single life basis.
Unlike the traditional forms of policy, the cover would pay an annual or monthly income for the remainder of the plan’s term rather than pay out a lump sum.
Thus, it can replace the primary breadwinner’s income for several years, dependent upon a particular client’s circumstances and, because of this, would usually be written on a level or basis or an index-linked basis designed to keep up with inflation.
There’s an adage that says you can never have too much insurance. Indeed, many people have one or more of the different types of policy, and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice.
However, affordability plays a massive part in the real world, so whilst it would be fantastic to cover yourself for every potential opportunity, a good advisor will sit down with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.