Some Illnesses are more Critical than Others
Summary
The factors you should think about when deciding on critical illness cover and the rangeof companies tendering thisstyle of policy.
Your mortgage lender may give you a number of financial products together with critical illness cover. However, as they are not experts in this market, you will most likely find a superior deal elsewhere.
The amount of cover on offer is just as important as the premium when looking forcritical illness cover. The policies from Alliance and Leicester and Nationwide are particularly restricted says a senior adviser at Tesco Finance, a telephone and online life assurance broker. Liverpool and Victoria covers only eight critical illnesses, with Norwich Union covering just 9, whereas the market leader, Swiss Life, covers 39.
Parkinsons, Aids, loss of speech, deafness, blindness and diabetes are some of the illnesses not covered by some of the High Street names. The Directorsays that it does not warrant consideringa policy, which covers less than 24 illnesses.
An umbrella term built into all policies is ‘total and permanent disabilities’, this term means you are covered for any condition, which prevents you working ever again.
You neeed to be aware of the wording as some policies cover ‘any occupation’ whereas other policies only cover your ‘own’ occupation. You will not get a settlement under a ‘any occupation’ policy unless you are completelyunable to carryout a job, however unskilled. For that reason The Directorrecommends you sign up for a ‘own’ occupation policy.
There are a range of companies as well as Swiss Life who offer comprehensive 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 Cover has been promoted by mortgage lenders. This resulted in lots of people never buying critical illness insurance. There are four times as many claims on critical illness insurance compared to life insurance, when the consumer has taken out both types of insurance.
Life insurance cover is really important, especially if you have dependents, as they will welcome the lump sum payment on your death. On the other hand critical illness cover should be the priority if you have debts to settle, above all a home owner loan. The adviserconsiders critical illness to be vital as it covers the cost of your house and food, even if you are incapacitated and unable to work.
The premiums will be higher if you are a heavy drinker or smoker and will also rise if you are older. A decreasing term policy, which is intended for people only wanting to insure the cost of their mortgage, is the cheapest.
One of Spencer Knight’s customers, a 26 year old non-smoker, who required100,000 pounds cover from a critical illness, long term policy, was given a price of 14 pounds 40 pence per month, which rose to £24-30 for smokers. However an adviserfrom LifeSearch recommended a policy, which gave both life insurance and critical illness cover for £16-60 a month, so it could be worth paying a bit higher premium.