Critical Illness

In the old days, if you were taken ill you either recovered and went back to work, or you died and your family received your life assurance. Nowadays modern medicine has increased the survival rate for some illnesses, although they may require a long recovery period, so that many people can find themselves with conditions for which, not to put too fine a point on it, a cash injection is a great aid to recovery.

To be told by your doctor that you have had a heart attack and that the stress of your work is partly to blame, so stop working or you may die is not, if you have a mortgage to pay and a family to keep, advice that is easy to take.

But if you have a critical illness policy you could receive a lump sum payment that will allow you to follow that advice. You can stop working, relax, concentrate on getting better, and not worry about the bills. (See also income protection aka PHI). (See also income protection, or permanent health insurance).

How it works

The policies pay out a lump sum if you find that you have any one of a number of specified conditions or need a named operation. Payment is normally made on either diagnosis, or if you survive a pre-determined time period following diagnosis, or progression to some specified level of seriousness, depending on the policy conditions.

For conditions that start minor but become serious, the policy will normally only pay out when certain criteria are met. For example, for a cancer claim the cancer must usually be malignant and invasive.*

The conditions covered vary from company to company, and you should check with the product provider to see exactly which conditions are covered, but will normally include:-

• some forms of cancer
• some forms of heart attack
• stroke
• some terminal conditions
• there will frequently be a long list of other conditions such as kidney failure, MS (multiple Sclerosis), Motor Neurone Disease, loss of sight, hearing and limbs, and others, the details of which may vary between insurance companies.

*The logic behind this is simple – if claims were paid for small early stage cancers, cured with a simple day patient operation, then premiums would have to be too high for anyone to afford. It’s much more important to pay out on the genuinely serious cases, such as those where early treatment fails, or which are discovered too late, and that is what your premium is for.

One important omission is Death.

Death may or may not be included. If excluded it will mean that while your premium will be lower, it also means that if, for example, you die in a car crash, there will not be any payment.

The reason for making death cover optional is that many people have sufficient cover from other policies, employers’ schemes etc, and so prefer to use their own money purely for the cover they do need – critical illnesses.

We will help determine what cover you need, what sort of policy you need and help find the most suitable and cost effective insurance company.

Corporate Note – if you are a company and have valuable staff whose absence due to a critical illness would cause a problem, (e.g. the sales manager whose personal touch closes the business and who is laid off by a heart attack, or the technical specialist whose skills are essential to providing solutions for clients) then as a company you can insure the company against this. We will be pleased to discuss this with you.