Critical Illness

If your doctor diagnosed you today with a serious illness such as cancer or heart problem, would it turn you from being independent to becoming reliant on others? The trauma of having such an illness diagnosed will be difficult enough, but you would still have the burden of meeting your financial commitments.

Critical illness insurance in the UK pays you a tax free cash lump sum if you are diagnosed with one of a wide range of serious illnesses including cancer, heart attack, stroke, brain tumour etc and are unable to work.

Some policies include death benefit and terminal illness cover. You will need to ask if your intended policy has this cover should you wish it. The plan normally pays out once and then ends.

Statistics show those up to age 65, are six times more likely to get a serious illness than to die.

There are two types of critical illness cover, basic or comprehensive policy. The basic plan covers the main conditions and a comprehensive plan will cover a lot more. Some of these may include loss of sight, permanent disability, loss of hearing and so on.

Critical illness can be bought as part of a financial package connected to your home purchase, or you can add critical illness cover as an option to a life insurance policy. In this case a guaranteed sum of money is payable upon diagnosis of a critical illness if you are eligible to claim, instead of terminal illness or death.

Diseases covered by most insurance companies include the following:

• Alzheimer's Disease;
• Aorta Graft Surgery;
• Benign Brain Tumour;
• Blindness;
• Cancer;
• Children's Benefits;
• Coma;
• Coronary Artery Angioplasty;
• Coronary Artery By-Pass Surgery;
• Deafness;
• Heart Attack;
• Heart Valve Replacement/Repair;

• HIV Infection for personnel in emergency and health care occupations;
• Kidney Failure;
• Loss of Limbs;
• Loss of Speech;
• Major Organ Transplant;
• Motor Neurone Disease;
• Multiple Sclerosis;
• Paralysis/Paraplegia;
• Parkinson's Disease;
• Stroke;
• Third Degree Burns;
• Total and Permanent Disability.

Some insurers cover other diseases these include, Creutzfeld-Jacob-Disease, HIV resulting from a physical assault, HIV from blood transfusion and pre-senile dementia. You need to read the terms and conditions from the insurance company and their guide to critical illness to find out exactly which diseases are covered.

Cover is provided for a certain number of years once the application is approved. Premiums are payable on a monthly basis. If you are diagnosed with an illness specified in the insurance plan you will need to survive for a certain time before a claim can be made. The time period varies from insurer to insurer but it is usually 28-30 days. Most plans cover your children until they are up to 18 years, subject to certain restrictions.

Most plans will not pay out if the claim is the result of a criminal act, drug abuse, pregnancy, self inflicted injury or war and civil commotion.

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The following factors will be taken into account by the insurance company before approving your application, these include:

In order to find the right cover for your needs and requirements or to get further clarification, contact an independent financial adviser. Don't forget to shop around for a good deal by getting a range of quotes from different providers.