What is Critical Illness Cover?

Critical illness insurance is a long term insurance policy designed to pay out a lump sum or income on the diagnosis of certain life threatening or debilitating (but not fatal) conditions, such as a heart attack, stroke, certain types/stages of cancer, multiple sclerosis and loss of limbs.

Once a successful claim has been paid by the insurer, it is at your discretion to use your money as you see fit. This could be to pay off your mortgage, cover your bills while you are off work, protect your family or pay to have private treatment. The money is yours and it is completely up to you what you decide to spend it on. In some cases the money could be used to change your home to suit your new circumstances if needed, such as adding a wheelchair ramp. The choice is down to you and your own personal circumstances. 

It is usually cheaper to take out life and critical illness cover than critical illness on its own. Critical illness cover is more expensive than life cover on its own as you are up to seven times more likely to claim on a critical illness policy. The good news is that a critical illness policy does not cost seven times the amount but still works out more cost effective to take out a life and critical illness policy.

What is life assurance?

Life assurance will pay out a lump sum if you are to die within your policies set term, however you can take out a whole of life insurance. Life cover can come in many different forms, for example, level term, decreasing term and increasing term insurance plans. You also have an option when it comes to the premium you will pay. There is the choice of guaranteed premiums, reviewable premiums and age costed premiums and when you opt to take out life cover you can choose to have the money paid out as a lump sum or as a monthly income. With life insurance you can also choose to take out the insurance policy on your own, as a single policy, or with a partner as a joint policy. So as you see there are so many choices and they can be daunting, Proadvice will explain everything you need to know and will help you to select the correct options and policy for you.

What types of Life Insurance are for available for women?

Women are now entitled to exactly the same insurance options as men, due to gender neutralisation which came into force as of the 21st December 2012.

One of the first choices to make when you decide to take out an insurance policy is the amount of life cover required, so how much money you want the policy to pay out in the event of your death. This is referred to in insurance terms as the sum assured. You can within reason; select as much or as little life insurance cover as you desire, however there are some providers that will cap their cover so have a minimum and maximum amount of cover they will offer with their insurance policies.

What type of Income Protection Plans are there?

There are two main types of income protection plans. There are long term income protection plans such as permanent health insurance and there are short term plans such as ASU, (Accident, Sickness and Unemployment) and PPI (Payment Protection Insurance) and MPPI (Mortgage Payment Protection).

The short term insurance plans are normally taken out to cover a debt or mortgage and there are usually no medical questions required to be asked. The short term plan is open to almost anyone in employment and as there are usually no medical questions, the plans often just have full blanket exclusion on all pre-existing medical conditions no matter how long ago they were. The insurance plans normally have a restricted pay-out period of one or two years and have to be reviewed every year due to the fact the plan is a general insurance plan the terms and conditions are subject to change. If you are to claim on your plan in year one and have a two year policy, the insurance company may decide to exclude the condition you have suffered, going forward.

This Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneymadeclear.org.uk.


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