Like Life Cover, Critical Illness Cover (CIC) can be taken as a standalone policy. CIC can be built into another life insurance policy on a level term, decreasing term (mortgage life insurance) or whole of life basis, or as a stand alone policy. When combined with a life cover policy it’s called either Death or Earlier Critical Illness Cover – pays on either death or critical illness but not both, or Death AND Critical Illness Cover – pays out twice on diagnosis of a critical illness and again on death. Some insurers condition that the a period of at least twelve month lapses between a claim for critical illness and death claim, otherwise there is only one payout. With most policies, once a claim has been made against a critical illness, further critical illness claims cannot be made.
CIC is critically important, a serious illness, such as cancer or heart attack, affects one-in-four women and one-in-five men before retirement age. You are also five times more likely to suffer a critical illness than dying before the age of 65. A critical illness can reduce you from being the family breadwinner to a financial liability. In terms of cost, critical illness is a bigger financial burden to the family than death. CIC is designed to ease the financial pressures by paying a tax-free lump sum if you are diagnosed with a qualifying critical illness covered during the term of the policy.
The range of critical illnesses covered varies from insurer to insurer, it is therefore imperative that you read the key facts document before you apply for your critical illness policy.
CIC Advantages & Disadvantages:
- CIC helps to protect yourself or your families financially if you are diagnosed with a critical illness, especially is you are the family breadwinner,
- CIC pays out a lump sum and how you use it is entirely your choice.
- CIC does not cover all critical illnesses, it is important that you compare providers’ Key Facts before you buy,
- CIC normally excludes pre-existing conditions,
- CIC can be quite expensive given that a claim is five times more likely than death before age of 65.
Standard Critical Illnesses Covered:
The range of critical illnesses covered vary from provider to provider, however we have produced standard list of critical illnesses covered to help with the your decision making.
Severity Based CIC:
This a revolutionary approach to CIC where the insurer pays out based on the severity of your illness or disability. This means you could receive a payout at an earlier stage of your illness, even if it is not life threatening. There are 6 levels of severity which are used to determine the level of payout on a claim. These levels have been set to ensure that claims paid out appropriately to reflect the impact that the serious illness has on your lifestyle.