| Critical
Illness Insurance is insurance that pays out a lump sum if you
are found to have an illness defined as being "Critical".
Within the booklet you get with your application form the insurance
company always provides a list of illnesses which it defines
as “critical illnesses”. You will find a typical
list of such illnesses below. For example, these illnesses normally
include loss of a limb, third degree burn, heart attack, stroke
and many other serious illnesses.
The crucial point with a “Critical Illness” is
that many people survive the illness for very many years.
During that time your earning power may well be a fraction
of what it was previously or even nothing. Unless you can
find a way of coping with a big drop in income and a probable
increase in your living expenses, the financial effects on
your family could be devastating.
Many think that “it won’t happen to me”
and we sincerely hope that it doesn’t happen to you
- but please consider the following facts: -
- 1 in 5 men suffer a critical illness before their normal
retirement age.
- 1 in 6 women suffer a critical illness before their normal
retirement age.
- 46% of women and 35% of men who develop cancer survive
at least 5 years
- 78% of stroke victims survive more than 12 months.
Are you so sure that it couldn’t happen to you?
Could you cope with the financial effects of critical illness?
Critical Illness Insurance is the way to protect you and your
family from the financial consequences of such a possibility.
Just a word of advice. Terminal Illness Insurance is not
the same as Critical Illness Insurance. First of all Terminal
Illness is included free of charge on all good the life insurance
policies whereas Critical Illness cover can be quite expensive.
So is Critical Illness Insurance worth the cost?
The essential difference between Terminal Illness Insurance
and Critical Illness Insurance is that Critical Illness pays
out immediately you are diagnosed with a serious illness (as
defined within the company’s list of critical illnesses).
On the other hand, Terminal Illness Insurance only pays out
if you are expected to die from an illness within 12 months
of diagnosis.
Now consider again the fact that 35% of women and 46% of
men who develop cancer will survive at least 5 years. You
could be one of those and still live for years. Terminal Illness
cover would not pay out but Critical Illness cover would.
We think you will now appreciate the merits of Critical Illness
Insurance.
What illness is classified as Critical Illness?
There are normally two alternative levels of cover. Standard
Critical Illness Cover (often known as 'Basic Cover') and
Comprehensive Critical Illness Cover.
Standard Critical Illness Cover covers illnesses that are
usually terminal but which you could survive for many years.
Comprehensive Critical Illness Cover includes a much wider
list including serious conditions that might not necessarily
be terminal, but which would certainly have a huge impact
on your working life.
The critical illnesses included within Comprehensive Critical
Illness Cover do vary between insurance companies but a typical
list is shown below: -
Alzheimer’s disease
Angioplasty
Aorta graft surgery
Aplastic anemia
Bacterial Meningitis
Benign brain tumour
Blindness
Cancer
Coma
Coronary artery by-pass
Creutzfeldt-Jakob disease
Deafness
Dementia
Heart attack
Heart valve replacement or repair
AIDs or HIV from a blood transfusion, occupational duties,
accident or assault
Keyhole heart surgery
Kidney failure
Loss of independent existence
Loss of limbs
Loss of speech
Major organ transplant
Motor Neurone disease
Multiple Sclerosis
Paralysis/Paraplegia
Parkinson’s disease
Stroke
Third degree burns
Total permanent disability
And some companies will include some cover for your children.
What is a “survival period”?
With Critical Illness insurance for a valid claim you have
to survive for a minimum number of days. This normally 28
days following diagnosis of a critical illness. However, we
are aware that some Insurance Companies have reduced this
to 14 days. You should check your proposed policy. The vital
point is that if you die within the survival period you cannot
claim.
Employment Cover
When you buy Critical Illness Insurance you also need to
decide what kind of “employment cover” you require.
Before the Insurance Company will pay out, they will want
to be certain that the illness prevents you from working normally.
The issue is what kind of work does the illness prevent you
from following?
To make things a bit more complicated, you may come across
four alternative definitions: -
- Critical Illness that prevents you from continuing your
current own occupation.
- Critical Illness that will not allow you to follow any
occupation.
- Critical Illness that will not allow you to follow any
employment to which you otherwise would be suited.
- A less common alternative is called “Work and Life
tasks”. Basically the insurance company lists six
“work tasks” (such as talking and walking) and
six “life tasks” (such as feeding and washing).
If you are cannot do any two tasks from the “work
tasks” or any three from the “life tasks”
then the illness qualifies you to claim.
Mortgages
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