InsuranceLecturer — When it comes down to personal insurances such as critical illness and life cover, often the critical illness side of this insurance is found harder to understand as there is a lot of information to be taken in.
Although it is very good, proactive and potentially rewarding taking out a life insurance policy, it can be worth the policy holder also taking out a form of critical illness cover with this as well. As it sounds life insurance only covers the death side of a person’s life.
Not only does a life policy pay out should the policy holder die but having the combined benefit that should the policy holder develop a critical illness that is specified by the insurance company that the benefits could potentially be paid out also.
The insurance is typically described as death or earlier critical illness, so should someone suffer a critical illness this would then subsequently stop the policy, as it would either pay out on death or critical illness.
If you can afford to pay for the extra amount that it would cost for the critical illness then it is of course worth while you taking it out. However on the other hand if you are over stretching your budget then there is no point because in the end it may resulting in you cancelling the whole policy and having no cover in force at all.
Taking out this sort of protection insurance ensures that both the insured party and the remaining family are covered financially should it ever be needed. This can be beneficial in more ways than one and in some cases more than you could have first thought.
It could be used to clear debts or even cover the costs of any potential treatment needed by the sufferer of the critical illness. Depending on how you wish the money to be spent and your family’s financial status at the time the money could even be used to help with your children’s education or some may even think of putting some money aside to help buy their own home in the future.
It is becoming harder and harder for young couples for example to buy their first home, a large deposit is needed to be able to get a suitable mortgage. Therefore some of the money could be used for that purpose along with any other wishes of the insured.
Insurance products are regulated and monitored by governing bodies to ensure that both the consumer and the provider are treated fairly. Should there be any discrepancies or complaints to be made they would be informed and the matter would be investigated.
There are a number of critical illnesses automatically included in a critical illness insurance policy. However they must meet the minimum standard set by the Association of British Insurers (ABI), but each individual insurer could if they wish increase the definition which would be classed as ABI plus.