What counts as Critical?

Summary

 

The things you should consider when choosing critical illness cover and the rangeof companies proffering thiskind of policy.

 

Your mortgage lender may propose several financial products together with critical illness cover. However, as they are not experts in this market, you will most likely find a superior deal somewhere else.

 

The level of cover on offer is just as vital as the premium when seekingcritical illness cover. The policies from Alliance and Leicester and Nationwide are extremely restricted says a Director at LifeSearch, a telephone and online life assurance broker. Liverpool and Victoria covers only eight critical illnesses, with Scottish Equitable covering just 10, whereas the market leader, Aviva, covers 38.

 

Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the conditions not covered by some of the High Street names. The advisersays that it is not worth thinking abouta policy, which insures less than 25 conditions.

 

An umbrella term built into all policies is ‘total and permanent disabilities’, this term means you are insured for any condition, which stops you from working permanently.

 

You need to be alert to the wording as some plans cover ‘any occupation’ whereas other policies only insure your ‘own’ occupation. You will not get a payout under a ‘any occupation’ policy unless you are totallyunable 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 Legal and General, Norwich Union, Standard Life, Scottish Equitable, Scottish Provident, Friends Provident, Liverpool Victoria, Skandia and Zurich Life.

 

In the past life insurance  has been promoted by a mortgage company. Therefore many people never considered critical illness insurance. There are 4 times as many claims on critical illness policies compared to life insurance, when the consumer has taken out both kinds of policies.

 

Life insurance cover is extremely important, especially if you have family, as they will welcome the lump sum settlement on your death. On the other hand critical illness insurance ought to be the priority if you have debts to settle, particularly a home owner loan. The Directorconsiders critical illness to be essential as it covers the cost of your living expences, even if you are ill and unable to work.

 

The monthly payments will be higher if you are a smoker or heavy drinker and will also rise if you are older. A decreasing term policy, which is aimed at people only wanting to cover the cost of their mortgage, is the cheapest.

 

One of Spencer Knight’s customers, a 25 year old non-smoker, who wanted150,000 pounds cover from a critical illness, long term policy, was given a price of £14-40 per month, which rose to 25 pounds 50 pence for smokers. However a Directorfrom Tesco Finance recommended a policy, which gave both life protection and critical illness cover for seventeen pounds eighty pence a month, so it could possibly be worth paying a higher premium.