Sunday , December 3 2023
critical illness cover

The Importance of Critical Illness Cover: Understanding the Benefits and Beyond

InsuranceLecturer — Critical Illness Cover is designed to pay you a tax free lump sum or an income in the event of being diagnosed with one of a number of different illnesses for example having a Heart Attack, being diagnosed with having Cancer or having a Stroke.

Critical Illness Cover is very popular for people taking out a mortgage to give themselves peace of mind that the mortgage will be paid off were anything serious to happen, but many people are also considering this style of policy for other reasons.

Some people also consider Critical Illness Cover in the event of being diagnosed with an illness and they require this as an income replacement while they are being treated and while they recover.

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With the price of income protection insurance increasing above the cost of normal inflation and many people opting to fund their own treatment instead of paying premiums to an Insurer, then you could consider a small amount of Critical Illness Cover to pay for private treatment if you were ever diagnosed with one of the illnesses under this type of policy.

A Medical Insurance policy will cover many more surgical procedures so we wouldn’t recommend this as an alternative but for those who are opting to pay for their own claims this is ideal to cover the cost of major surgery related to Cancer and Heart Disease.

Your benefit can be used for any purpose that you wish e.g. –

  • to pay off your loans or mortgag
  • to buy special equipment to help you during your illnes
  • to adapt your car to make it easier to use/driv
  • to hire help
  • to go on a round-the-world trip
  • to take care of the future for your family
  • for any purpose you prefer

The thought of suffering a serious critical illness doesn’t bare thinking about; the reality is it’s a true threat to each and every one of us. Imagine the devastation? Critical illness insurance covers a wide range of benefits to help with many types of illness/disabilities and their surrounding circumstances.

What can critical illness insurance do for you? Imagine the worst case scenario; you unexpectedly suffer from an illness which leaves you unable to work.

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How do you keep up with the mortgage payments? How do you feed the family? You may even need to make alterations to your home depending on whether your physical abilities have been affected.

Who’s going to pay for these alterations? Would you need to hire a carer? Critical illness insurance is there to help with all sorts of unexpected situations. Above are just a couple of examples you could possibly be facing.

What financial help would I receive being a policyholder? Critical illness insurance will either pay out a tax free lump sum, or provide you with a regular income if diagnosed with certain critical illnesses. Some people may choose take out critical illness insurance if they have recently been diagnosed with a severe illness such as cancer or heart disease.

This can provide many benefits when needing operations and aftercare. Not only does critical illness insurance protect your own wellbeing but also that of your family. Dealing with a critical illness is often just as painful to surrounding loved ones, having extra support and protection benefits all involved.

How do I pay for my critical illness cover?

Critical illness cover is paid on a monthly basis and the amount of the insurance would be agreed with you once the application had been underwritten.

If you were to at some point stop paying your premiums because you either wish for the policy to cease or you just may not have been able to afford it one month, the insurance provider would tend to give you a thirty day grace period where they believe you will catch up with your monthly payments the next month.

If the direct debit is still open then the insurance provider will tend to try and collect the outstanding premium fourteen days later as this is the usual time period where it takes an insurance provider to set up a direct debit with the client’s bank.

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If the direct debit was cancelled by the payer a new direct debit would need to be set up in order for them to be able to take the outstanding balance. In some cases insurance providers will let the insurance broker give them the new bank details over the phone as long as they have permission from the payer otherwise a client may have to complete a new direct debit mandate.

In a lot of circumstances people change their bank account and there bank would normally say that they will transfer all their existing direct debits however this typically does not go as planned for the client.

They will then tend to receive numerous letters or phone calls from those who they pay by monthly direct debit until all information has been switched over to their new bank account.

In some cases it is easier for the individual to contact all the companies which they have a direct debit set up as for example with a critical illness cover as it may mean the cover may cease after a certain amount of time if the premium is not paid. The timescale however will depend on the insurance provider as some are quicker than others.

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If you are out of the country and your direct debit does not go through in time and you do not realise you are outstanding one or two month’s premium, it will depend on each provider.

Some insurance providers who offer such insurance may take you off cover fairly quickly however others may keep you on their system for a few months which would then give you the opportunity to contact them when you got back.

The options which are then available to you are then to either pay the outstanding amount over the phone there and then or on your next direct debit you would then pay the full outstanding amount.

In some cases if this period reaches anything beyond three months the insurance provider may also ask you to complete a declaration of health to ensure that your health circumstances has not changed since the original critical illness cover was taken out.

If there were changes to be made to the original critical illness cover then this may affect your plan and they may require further medical evidence to support the additional information you have given.

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If the changes are minor illnesses it may not affect the plan however it is best to update them on such a form to ensure that if a claim was to be made they would not have any reason not to pay out on the plan.

Also it is important that you keep the insurance company updated with your current address, telephone and even email address so that they can contact you as soon as a payment is missed to ensure a quick turn around therefore reducing the chance of being off cover at any point in time. It would also be advisable to inform your insurance broker as they may wish to contact you if your direct debit failed at any point in time.

What will it cost me? There are thousands of insurers out on the market, all with competitive and affordable price plans to suit every budget. By searching a wide selection of insurers, you should be able to find a plan to find a policy that best fits your requirements.

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