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Critical Illness Insurance
Critical Illness (CIC) is designed to pay out a tax free lump sum when the policy holder is unlucky enough to get a Critical Illness covered by their plan. The main Critical Illnesses covered are Heart Attack, Cancer & Stroke.
The average policy on the market covers 34 illnesses. The more comprehensive policies cover between 40 – 100. The more inclusive policies cover illnesses such a Crones Disease, Meningitis and Lung Disease which are also very common illnesses.
Less invasive types of cancer are not usually covered due to the fact these conditions are generally easily treatable and very curable these days. Some of the better policies will pay a partial pay out on Mastectomy DCIS (Breast Cancer) which can be very useful.
Critical Illness usually runs alongside a life Insurance policy but can also come stand alone. Critical Illness payments can be used to pay off a mortgage, replace lost income in the event of being unable to work or pay for private medical care. As with life cover, Critical Illness can be level, decreasing or increasing. The premiums can also be guaranteed or reviewable as well as set up jointly or on a single life basis.
Some policies especially those sold through the banks are far less comprehensive and in our view substandard. They typically only cover 27 illnesses on average. The main providers include Direct Line, Scottish Widows, Lloyds TSB, RBS and The Co-op. You may be surprised how poor your cover is for the price you’re paying.
It’s easy to find out how good your current policy is by going onto www.defaqto.com/star-ratings/critical-illness Defaqto independently rate financial products a bit like the AA rating hotels. Each provider is rated between 1 – 5 stars. One star equates to a very limited policy with five stars being very comprehensive. We only sell Critical Illness policies which are rated Four stars and above.
Critical Illness is significantly more expensive pound for pound compared to life cover. This is due to the fact you are 6 times more likely to get a Critical Illness than you are to die. This is reflected in the price you pay. This however should not put you off as Critical Illness cover is a very important part of your financial protection solution and some Critical Illness cover is better than nothing.
When you take out Critical Illness Insurance, it is important that you remember to disclose all health conditions past and present. This is the reason why our advisers are thorough when it comes to the application process.
Being diagnosed with a Critical Illness is a life shattering experience and while we appreciate that there is little consolation in receiving funds from such a scenario, our aim is to provide you with the most comprehensive policy available at the most competitive rate, tailored towards your own individual needs and to ensure that your suffering is reduced.
This cover pays out a cash lump sum if you are diagnosed with one of the critical illnesses specified in the policy
Things to think about: your mortgage balance, your other total financial commitments,maintaining your family's lifestyle, and any dependents' current or future educational needs
Level Term:If you die, this pays out a fixed amount of cash.
Decreasing term:
The sum paid out if you die decreases over time, ideal for covering a repayment mortgage or loan
Are you an ex-smoker?If you have used any tobacco products or nicotine replacement therapy within the last 12 months, you should answer "Yes".