Critical Illness Insurance

Critical illness insurance is one of the most controversial policies you can buy. Its fans say it’s an essential safety net and can provide a vital lump sum of money when you need it most. But critics say it is unreliable, overly complicated and often mis-sold. So what’s the truth? This independently researched and written website is designed to find out. We’ve spoken to all the experts and examined all the facts. Read on and you’ll have all the information you need to make up your own mind.



What is critical illness insurance?

It’s a policy that pays out when you are diagnosed with one of a long list of severe medical conditions. These can vary widely but are normally based around seven key areas – heart attacks, cancer, strokes, kidney failure, multiple sclerosis, major organ transplants and coronary artery bypass surgery. The money is paid out to survivors – you normally get it around 21 or 28 days after diagnosis. It’s also paid regardless of the severity of your illness – if you recover fully and are soon back at work you don’t have to return the cash. And you can spend it on anything you want. Insurers say many people use it for holidays that help them recover from their illnesses. Others use it to modify their homes to make life easier in the future. Some us it to repay debts and get some peace of mind when they need it most. It’s up to you – that’s one of the beauties of critical illness cover.

Definitions of Critical Illness Choice

It is considered that the Association of British Insurers should have kept core and additional categories for critical illness conditions separate rather than putting them into one group.

It means that many advisers and clients are unsure which count as the most valuable.

Advisers are now recommending products that have more conditions covered although they maybe those that have small risks.

Some products have forty-four different conditions and look better than those with only four but this is not always the case.

Statistics show that cancer, heart attack, stroke, total permanent disability and multiple sclerosis are the main claims but advisers seem unaware of this. Advisers would be more likely to refer these if they were core conditions and others would be additional.

Life insurance warning to 20-somethings

An insurance comparison website has expressed concern that people in their 20s may not be taking out enough life insurance.

Research from Insurancewide.com found that the typical applicant for life insurance products is male and aged between 35 and 42, but the firm said that some people should start buying policies earlier.

The figures also revealed that while up to the age of 28, equal numbers of men and women are searching for policies, after this age, between 65 and 70 per cent of enquiries are from men.

Chief executive of Insurancewide.com James Harrison said that it was encouraging to see people in their late 20s investing in their future but that people who have debts, a mortgage and dependents or are self-employed should start buying earlier.

"Life insurance is designed in various formats to provide those who depend on you for their wellbeing with an ongoing income if you die or contract a critical illness and to prevent your family bearing a huge financial burden as a result of your premature death," he commented.

Sainsbury's Bank estimates that those with life insurance are underestimating the amount of cover they need, to the collective tune of £2.3 trillion.

Insurances Limited comments ‘contracting a Critical Illness seems to be more in peoples minds than death. Whilst there is a general consensus that we as humans do no think about protecting our families in the event of death we do indeed think about our own quality of life. This is probably why Critical Illness has become popular in recent times and suggests us mere mortals are truly thinking about ourselves!’

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