Are Your Illnesses Critical
Summary
The important facts you should think about when deciding on critical illness cover and the rangeof companies tendering thissort of policy.
Your mortgage provider may propose a number of financial products including critical illness cover. However, as they are not experts in this field, you will probably find a better deal somewhere else.
The level of cover on offer is just as significant as the premium when seekingcritical illness cover. The policies from Nationwide and Alliance and Leicester are very limited says an adviser at Money Supermarket, a telephone and online life assurance broker. Legal and General covers only eight critical illnesses, with Scottish Equitable covering just 9, whereas the market leader, Swiss Life, covers 38.
Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the illnesses not covered by some of the Insurance companies. The advisersays that it does not warrant consideringa policy, which insures less than 26 conditions.
An umbrella term incorporated in all policies is ‘total and permanent disabilities’, this term means you are covered for any illness, which prevents you working ever again.
You neeed to be aware of the lanuage as some policies cover ‘any occupation’ whereas others only insure your ‘own’ occupation. You will not get a settlement under a ‘any occupation’ policy unless you are utterlyunable to carryout a job, however menial. Consequently The senior adviserrecommends you sign up for a ‘own’ occupation policy.
There are a range of companies as well as Swiss Life who offer full cover including Scottish Provident, Scandia, Zurich life, Friends Provident, Scottish Equitable, Liverpool Victoria, Norwich Union, Legal and General and Zurich Life.
For years Life Insurance has been promoted by a mortgage company. This has resulted in critical illness cover never being considered by many people. There are five times as many claims on critical illness insurance compared to life policies, when the consumer has taken out both types of policies.
Life insurance cover is very important, particulary if you have dependents, as they will welcome the lump sum payment on your death. However critical illness cover ought to be the priority if you have debts to settle, particularly a mortgage. The Directorconsiders critical illness to be essential as it covers the cost of your house and food, even if you are ill and unable to work.
The monthly payments will be higher if you are a heavy drinker or smoker and will also be more expensive if you are older. A decreasing term policy, which is aimed at people only wanting to cover the cost of their home owner loan, is the cheapest.
One of Spencer Knight’s customers, a 27 year old non-smoker, who required£150,000 cover from a critical illness, long term policy, was quoted £15-50 per month, which rose to £24-30 for smokers. However a Directorfrom Tesco Finance suggested a policy, which gave both life insurance and critical illness cover for 16 pounds 60 pence a month, so it could be worth paying a bit higher premium.