Critical Illness Cover

    Critical illness insurance which is a very popular form of protection insurance that can be taken to protect yourself if you were to ever suffer from a critical illness that is covered under the plan you decide is right for you. Many people often take critical illness insurance and critical illness cover as a combined plan with life insurance. Or if you prefer you can take it as a standalone plan. Critical illness insurance can be taken to suit your circumstances and used to protect either family or liabilities you may have or both. If you are looking to protect your family then it would be advisable to consider a level term plan. A level term critical illness plan will run over a specific term you decide at the outset. The sum assured you choose will then remain the same during the duration of the plan.

Critical Illness Insurance

  So for example if you decided to take £100,000 of critical illness cover and you were to have a claim that was successful on the plan it would pay out the same at year 1 as it would at year 25. Your family would be protected by this style of plan as it would offer a lump sum payment that could be used as a form of income to make up for lost income due to you suffering the critical illness. This form of critical illness insurance can also be used for offering protection if you have an interest only mortgage. The reason for this being ideal for an interest only mortgage is that the amount you owe on an interest only mortgage never reduces. This type of mortgage is reliant on another form of repayment vehicle to ensure the loan is paid off.

The alternative to the level or interest only critical illness cover is one that is offered on a decreasing or a reducing basis. This works slightly differently to a level plan where the sum assured decreases over the term you take the plan out over. So for example if you decided to take £100,000 of critical illness insurance over 25 years and you were to have a successful claim it would pay far less at year 24 than it would at year 1. This enables the premium to be considerably cheaper than the level version of the critical illness insurance. If you are protecting a capital and repayment mortgage then this form of insurance is ideal, this is due to the amount on your mortgage reducing year after year and your liability reducing on the mortgage. The amount that is outstanding on your mortgage as it reduces should mirror the amount of cover you have in your critical illness cover plan. This should ensure that there is always sufficient to pay off your mortgage.   Critical Illness Quotes    You can in addition to deciding that you want decreasing or level critical illness insurance, choose if you want your premiums on the insurance guaranteed or reviewable. If you decide you want a reviewable premium this is often the cheaper alternative initially, the critical illness insurance company with whom you decide to take the insurance out with, can if they choose review your premium from time to time. These reviews are normally every 5 years and the insurance company could take one of three choices at this point. They could decide to put the premium up per month, put the premium down per month or they could decide to keep the premiums the same as they are currently. The idea behind a reviewable premium is that the premium initially is cheaper and if you are on a budget then this will help keep the prices down for you. The alternative to a reviewable premium is a guaranteed one. A guaranteed premium, although maybe more expensive initially than a reviewable one will remain the same throughout the full term of the contract and can’t be changed by the insurance company. The guaranteed premium will give you a little piece of mind when planning your budget.

When looking at the actual critical illness cover plan themselves the cost of them can vary depending on different circumstances. Some of the criteria used to calculate premiums are; health, age, smoking status and occupation. These can have quite a dramatic effect on the premiums of the plans that you will pay month by month. One of the other main areas where the cost of the plan is calculated is the actual amount of cover applied for. You will normally find that the higher the sum assured on the plan the higher the monthly premium will be. You will also find that term that you take the plan over will have a direct effect on the premium you will pay per month. You will often find that normally the longer the term you take the higher the premium will be on a monthly basis. The premiums you pay on the insurance plan are normally on a monthly basis and you will often find these are paid via direct debit.

There can be quite big variations in the critical illness insurance plans from one company to the next. You may want to consider carefully how many illnesses you wish to be covered for. A good bench mark for the numbers of critical illnesses that should be covered under your plan is about 40. If you have a plan with approximately 40 illnesses covered then it is likely to be one of the market leaders. The main claims that are made under a critical illness insurance plan are heart attack, cancer and stroke. The heart attack is often for males as is the strokes and caner particularly breast cancer for females. The Association of British Insurers (ABI) have a core list of critical illnesses that must be covered under your plan and they also have some definitions of when you should be able to claim under your plan. Typically you should be looking for ABI plus definitions within the plan you chose, this means that the definitions under the plan are above and beyond what is the minimum requirement.

Critical Illness

If you are in a relationship with someone you could decide to take a joint critical illness insurance plan. Typically when you take a joint critical illness plan this will pay if one of the two were to suffer from a critical illness and this is normally the first one to suffer from a critical illness. By taking a joint critical illness cover plan this is normally a more cost effective way of taking your insurance and sometimes can be cheaper than taking singles plans. However if you are prepared to pay a little bit more for two single plans this could be considered better advice.

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