Some Illnesses are more Critical than Others
by diywealth on Sep.26, 2009, under diy
Summary
The factors you should think about when choosing critical illness cover and the rangeof companies offering thisstyle of policy.
Your mortgage lender may give you a number of financial products together with critical illness cover. However, as they are not specialists in this field, you will possibly find a superior offer elsewhere.
The level of cover on offer is just as significant as the premium when looking forcritical illness cover. The policies from Alliance and Leicester and Nationwide are particularly restricted according to a Director at Direct Line, an online and telephone life assurance broker. Standard Life covers only eight critical illnesses, with Norwich Union covering just 10, whereas the market leader, Aviva, covers 38.
Parkinsons, Aids, loss of speech, deafness, blindness and diabetes are some of the illnesses not covered by some of the High Street names. The advisersays that it is not worth consideringa policy, which insures less than 24 conditions.
An umbrella term included in all policies is ‘total and permanent disabilities’, this term means you are insured for any ailment, which stops you working ever again.
You must be watchful of the lanuage as some policies cover ‘any occupation’ while others only insure your ‘own’ occupation. You will not receive a settlement under a ‘any occupation’ policy unless you are completely incapable of carryingout a job, however menial. Therefore The senior adviserrecommends you sign up for a ‘own’ occupation policy.
There are a range of companies as well as Aviva who offer comprehensive cover including Scottish Provident, Scandia, Zurich life, Friends Provident, Scottish Equitable, Liverpool Victoria, Norwich Union, Legal and General and Zurich Life.
For years Life Insurance Cover has been promoted by a mortgage company. Therefore many people never considered critical illness insurance. There are five times as many claims on critical illness policies compared to life insurance, when the consumer has taken out both types of policies.
Life insurance cover is extremely important, especially if you have dependents, as they will welcome the lump sum payment on your death. On the other hand critical illness insurance ought to be the priority if you have debts to settle, particularly a mortgage. The adviserconsiders critical illness to be essential as it covers the cost of your living expences, even if you are ill and unable to work.
The monthly payments will be larger if you are a smoker or heavy drinker and will also rise if you are older. A decreasing term policy, which is aimed at people only wanting to insure the cost of their home owner loan, is the cheapest.
One of Spencer Knight’s customers, a 30 year old non-smoker, who required£100,000 cover from a critical illness, long term policy, was given a price of £14-40 per month, which rose to £24-30 for smokers. However a Directorfrom Tesco Finance suggested a policy, which gave both life protection and critical illness cover for seventeen pounds eighty pence a month, so paying a higher premium could be worth it.
