Critical Illness Insurance —
Critical Or Ridicule?
Critical illness cover (CIC) is a type of insurance which provides a significant one-off payment if you are diagnosed with a specified life-threatening condition — specified being the important term, because if your illness isn't in the terms and conditions — you won't get the payment. Over the recent years, critical illness cover has gained in popularity due to lower costs and apparent simplicity.
Critical illness insurance can be sold as part of a mortgage package or additionally as a stand-alone policy. Critical illness cover can also be commonly associated with life insurance, with certain CIC policies paying out either on the diagnosis of a particular illness or on death, but not both, whilst other CIC policies pay out in both events.
When you first purchase the critical illness insurance policy, there might be an option for buy-back insurance. This would permit you to buy additional critical illness cover or life insurance, typically at a minimal cost, after you have made a claim on your existing CIC policy. Such an option is often worth considering, as the survival rates from a critical illness are usually very good and it can be extremely difficult to obtain new cover following a critical illness. Buy-back critical illness cover usually protects against the three major critical illnesses: heart attack, stroke and cancer from which you are most likely to recover, but also risk an attack later in life.
Bear in mind that when you take out life critical illness insurance, there is a standard waiting period between diagnosis and possible payout, from six months to a year for certain conditions, such as total permanent disability. However, if the diagnosis is very transparent, it is possible that the insurer would consider waiving the waiting period. The maximum payout varies from policy to policy, though it's not unusual to see capped payouts of £500,000 or £1 million, though cover for higher amounts might be available on request. When the policy is sold as part of a mortgage package, the lump sum is designed to pay off the loan on the home, but with other policies, there may be no restrictions on how you use the money. Suggested uses may encompass covering living expenses whilst you are off work, though the money could additionally pay for private medical treatment, carer services, home improvements, career retraining, help for your dependents and even a holiday or break away.
Nearly all critical illness insurance policies cover seven main conditions: cancer, heart attack, stroke, kidney failure, coronary artery bypass, multiple sclerosis and major organ transplant. Policy exclusions in critical illness insurance may include Alzheimer's or Parkinson's disease if diagnosed after the age of 60. Don't be seduced by long lists of ailments — as other policies may include these but under a broader heading. It is important to note prior to taking out a policy, that there may be certain exclusions in the insurance contract which may prevent payout due to life choices and circumstances. According to the Association of British Insurers, the most common exclusions include:
* Aviation * Criminal acts * Drug abuse * Failure to follow medical advice * Hazardous sports and pastimes * HIV/AIDS * Living abroad * Self-inflicted injury * War and civil commotion
The consumer organisation estimates that two thirds of the population suffer from a critical illness at some point in their lives. However, whilst the principle of critical illness insurance might be relevant, it is always worth ensuring your policy meets your exact needs, so if the worst happens, you're not caught out by the small print. It's important to shop around for quotes and different policies. Comparison sites such as moneynet and moneysupermarket will allow you to do this.
About The Author:
Rachel lives with her high horse in the Scottish mountains, near Edinburgh. Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk
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General Knowledge —
Critical Illness Insurance
by: Tyler D King
Critical illness can happen to anyone, and often does. If you are diagnosed with a critical illness, recovery should be your first concern. Having Critical Illness Insurance will allow you to focus on your health, because it can take the stress of worry about money away. Insurance will pay for a large sum of your medical treatments for a critical illness, and many companies have as many as 30 illnesses insured, including cancer, heart attack, stroke and multiple sclerosis.
Most insurance companies will allow you to use the money provided for your critical illness any way that you need. For example, if you decide you want to pay for hospital fees yourself, you can use your insurance money to avoid drawing money out of personal savings, help to pay off debt, allow your partner to take time off work to look after you or any other way you choose. There are different levels of critical illness insurance, and the one you decide on depends on how much you can afford. Having basic coverage will usually cover five or six conditions, while comprehensive coverage will cover all of the illnesses the insurance company has to offer. Comprehensive coverage will cost more, but a good company should provide about 80% coverage, even for basic insurance.
Costs of insurance will also depend on your age, health and other lifestyle factors. The necessity of having critical illness insurance is often higher than people might think. Statistics show that a person is more likely to contract a critical illness than they are to die before the age of 75. A critical illness can drastically change your lifestyle because you may not be in a condition to work as you had before experiencing the illness. Insurance can help you financially during treatment as well as after recovery to help you maintain a good quality of life. Many companies will also financially help out your family in case of your own death.
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