If you are a Critical Illness Cover (CIC) policy holder and you’re diagnosed with one of a number of listed critical illnesses, the policy will be triggered and it will pay out a lump sum, free of tax.
If you want the cover to do what it is supposed to, as with any insurance, it is important to use a quality financial adviser to broker the cover for you.
For example, the illnesses covered, and illnesses excluded from cover, vary widely between insurers and pre-existing conditions tend to be excluded, but some insurers will base cover on your personal medical history.
People often ask what the difference between critical illness cover and life cover is, so here it is:
The key difference is that life cover will pay out if you die, whereas, critical illness cover will pay out if you suffer an illness (covered by the policy definitions and you survive for a minimum period). The sum assured from a critical illness policy could be used to pay for medical treatment, cover adaptations to your home (such as mobility aids, special equipment or structural changes required due to a disability) or to pay off your mortgage. In fact, it can be used for anything. The fact is, in some cases, the payout may be the difference between surviving the illness or not, but at minimum it is designed to make your life more comfortable if the illness is terminal.
What critical illness cover doesn’t do is produce a regular income. If you were unable to work due to a critical illness, a good income protection policy would cover your ongoing expenditure.
All insurance premiums will increase with age, but will also depend on your personal medical history and that of your parents and immediate family, because many diseases are hereditary.
Alex specializes in brokering suitable Critical Illness Insurance cover for contractors and self-employed people.
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Perhaps the most important advice I give to my clients is to plan carefully and do not leave things to chance. My job is to help you grow and protect your assets by providing the know-how you need to make informed decisions about your future. I then help you implement the strategy into a reality by working with you over the long term, helping you to build, brick by brick, a successful and robust financial situation.