A Complete Guide to Critical Illness Cover
Getting your head around life insurance and critical illness cover can be difficult, which is why our team are on-hand to help guide you through the process. Here, we answer all your critical illness insurance questions, including:
What is critical illness cover?
How much critical illness cover do I need?
What does it cover?
How much is it?
Is it worth the cost?
Can you get critical illness cover without life insurance?
Benefits of critical illness insurance
The best critical illness cover
Critical illness cover (CIC) is a type of insurance policy that provides the policyholder with a lump-sum pay-out if they are hit with an illness defined as being ‘critical’ according to the insurers.
Policyholders will only receive the pay-out if they are diagnosed during the policy term with a condition that is listed on the predetermined contract as a critical illness.
The length of the policy term is determined when you take out the insurance, but most individuals typically opt for cover that lasts until certain milestones – when your children have grown up, or when you have paid off your mortgage, for example.
Due to the nature of its timescale, critical illness cover can be added onto a standard life insurance policy, such as term life or whole of life insurance. However, you’re usually only able to claim once if you decide to have a combined policy, so you may want to consider having a standalone one instead.
People opt to take out critical illness insurance for a variety of reasons, and the amount you need generally depends on your personal situation and needs.
The best way to decide whether or not you should take out critical illness cover is by weighing up the benefits of the payout against the monthly cost. If you have no dependents other than yourself, you may take out critical illness insurance to ensure that you can keep on top of your mortgage and other monthly bills in the event of you becoming severely ill. Many mortgage applications require you to have some sort of cover – usually decreasing term insurance, and you can choose to have a CIC policy to provide that extra level of cover if you wish.
Being ill can bring about certain costs that you may be unable to cover if you are out of work (such as home modifications, car modifications and mobility aids to help with your condition), but critical illness insurance can help cover these expenses while you’re still around, unlike standard life insurance.
People with children are also likely to pay for critical illness cover to make sure that their family and dependents are provided for financially if they are unable to work as a result of the specified illness.
There are a few different types of critical illness insurance policies available, with most plans covering illnesses regardless of how severe they are. Although they’re less common, some other CIC policies are severity-based, where the payout depends on the severity of your illness.
Whatever is listed as a ‘critical illness’ in the agreement set out by the policyholder and life insurance provider, you will be covered for those specific illnesses only, so always make sure you are happy with the policy and exactly what you’re going to be covered for before you agree to it and start paying your monthly premiums.
Which type you opt for and how much cover you take out depends on your individual preferences, but you can speak to one of our friendly and experienced advisors here at Unite Life for some further personal guidance.
When to get critical illness cover
Critical illness insurance could be useful for you if:
- You’re single and have no dependents. This is because you receive a lump sum to use while you’re alive, rather than leaving the pay-out behind to nobody (as you have no dependents), as basic life insurance would.
- State benefits are not sufficient. You usually receive around £100 a week – which isn’t enough to replace most incomes in the UK.
- You aren’t able to work but your savings aren’t enough to cover your usual outgoings.
- There’s no long-term sickness pay package with your current employer.
What critical illness insurance covers you for varies with each provider, so be sure to check the conditions of your policy before committing to anything. Although they may differ slightly, policies often pay out if you are struck with the following illnesses:
- Some types of cancer*
- Heart attacks
- Major organ transplants
- Blindness or deafness
- Parkinson’s Disease
- Severe head injuries
- Bacterial meningitis
- Multiple sclerosis
- Loss of limb(s)
With many life insurance providers, the list goes on – just remember to check the specific illnesses you’ll be covered for. If you suffer from a serious illness that isn’t on your insurance policy, you will not be covered.
*Some cancers are not covered by critical insurance policies due to there being such a wide range of severities and types, but we will be sure to walk you through exactly what your policy includes and excludes before you commit to it.
Some critical illness policies also refuse to cover illnesses that occurred as a direct result of a pre-existing condition, which is why you must be totally honest during the application process when declaring your medical history, so that we can determine whether or not your policy will fully cover you.
Providing medical history for critical illness insurance
In order to receive a critical illness cover quote, you will need to provide details of your medical history to insurers so that they can determine how much of a risk you are to them and the cost of the premiums you will pay.
Although it may seem tempting to avoid disclosing any past illnesses to get a cheaper insurance premium, it will leave you worse off in the long-run. Being untruthful in your insurance application will more than likely lead to a claim on your policy being refused, meaning that you won’t receive a payout and essentially, you will have wasted all the money you paid into the policy, so you must remain completely honest throughout the life insurance application and make sure you provide all the necessary details asked for.
The cost of life insurance in the UK generally depends on the amount of cover you need, the type of policy, the length of the policy, as well as your age, health and lifestyle.
Most people get critical illness cover as an added policy on top of their standard life insurance, acting as an added level of reassurance for the policyholder.
A life and critical illness cover policy worth £100,000 for a non-smoking, healthy 30-year-old would typically cost around £25 a month over a 20-year term, according to reports. Life and critical illness policies can be cheaper for younger individuals, due to the lesser risk they usually pose, so it’s worth weighing up your life insurance options as soon as you take out a mortgage or have children of your own that depend on your income.
You’re likely to pay more for your premium if you:
- Have a history of illness
- Have family members with serious illnesses
- Are being treated for pre-existing medical conditions
Make sure that you are able to afford the monthly instalments from the beginning because critical illness policies will not pay-out if you have not paid your premiums, leaving you with nothing and throwing your hard-earned cash away.
Whether critical illness cover is worth it or not depends on your personal situation, as we mentioned previously. However, if you’re considering critical illness insurance, you should ask yourself – could your family cope financially if you were unable to work due to illness? Or could you cover your mortgage if you live alone?
No one wants to think about it and no one thinks it’ll happen to them, but people are struck by critical illnesses each day and the unexpected can always happen. It’s hugely important to have plans in place for if the worst should happen, so that you are able to cover your financial commitments and your dependents can continue living comfortably without your usual earnings. Although it’s inevitably already stressful being diagnosed with a critical illness, having some financial security can make a huge difference in softening the blow, knowing that your bills will be paid and loved ones taken care of.
What is a good critical illness policy?
It’s important to let us shop around for you before you commit to a critical illness policy, as some can be better and more suited to you than others.
We’ll look for policies with fixed premiums – meaning that the amount you pay for cover stays the same throughout the term of your policy, so you won’t face premium increases and can budget more accurately. Policies without fixed premiums are likely to rise at some point, so it’s certainly worth looking for fixed-premium insurance.
Some policies also offer cover for the policyholder’s children, meaning that they will be protected under their parent’s insurance and a lump-sum pay-out will be administered if they fall critically ill.
More than anything, we will look for the best critical illness policy to suit your individual needs, so be sure to give us a call and provide us with all the information we require to retrieve the most suitable deal for you.
Life insurance and critical illness cover are different; critical illness cover pays out if you are diagnosed with a specific illness, whereas life insurance only pays out if you pass away during the policy term, so there are obvious benefits with both. Many people opt to use a critical illness policy as an additional type of cover alongside basic life insurance, in order to reassure them that they’ll receive a pay-out if they become critically ill.
However, you are in no way required to pay for both and can opt to take out one without the other easily here at Unite Life.
It’s also worth noting that you could even get cheaper critical illness cover if you combine it with a basic life insurance policy – so get in touch with our team for more information and advice!
There are pros and cons to critical illness insurance, just as there is with all types of policies, but we feel that the pros far outweigh the cons, as you see in our list of benefits below.
Critical illness insurance:
- Pays out while you’re still alive
- Covers a wide range of illnesses
- Provides financial security for loved ones and yourself during a difficult time
- Includes a fixed lump-sum which is agreed when you take out the policy
- Can be bought alongside basic life insurance
In terms of cons, well, there aren’t too many. Critical illness cover may not be as useful if you have no financial commitments, but neither is any type of life insurance. You do, however, need to be aware that not every illness is covered, and you may not receive a pay-out if you’re diagnosed with something that is not listed on the policy agreement.
You may find that income protection insurance is more suited to you, in which case, we can also discuss these options to determine what type of cover is best suited to you.
If you already have a critical illness policy and aren’t happy about what’s covered within it, we can review the policy for you here at Unite Life and we may even be able to find you a better deal than what you currently pay.
Here at Unite Life, we are a life insurance broker with experienced and friendly advisors on-hand to help you with all-things relating to life insurance and critical illness cover. Not only will we look for cheap critical illness cover for you, we will use our expertise to find you the best critical illness cover in the UK to suit your personal needs and cover you fully should the worst happen.
It’s important to remember that the cheapest critical illness insurance may not always be the best option, as you essentially get what you pay for with insurance, so it’s important you have the right cover in place.
This is why our advisors are available to help you get the best deal, so you get extensive life cover with the most affordable and cost-effective policy.
We hope you found use in our critical illness cover guide, and if you want to know more about the services we offer here at Unite Life, simply get in touch with us or complete our short contact form today and we will be in touch at a time that best suits you. Remember, getting in touch with our friendly advisors is completely free and you’re under no obligation!