Critical Illness Cover

Critical Illness Cover protects you against the unforeseen events that life can throw your way. While it’s not something that would typically cross your mind, having critical illness cover in place means you will receive a lump-sum payment in the unfortunate event you become seriously ill or have an injury that impedes you from working.

A critical illness policy comes as an additional monthly cost alongside your life insurance and other outgoings, providing you with peace of mind if ever have to use it.

While being critically ill or suffering from an injury is stressful enough, the financial impacts are likely not just to affect you but your family. The team at Diabetic Life are experts at finding life cover and critical illness cover. Supporting you from the beginning, if you apply for critical illness cover through us, we can give you the peace of mind that your family will be taken care of even if you can no longer provide for them.

Finding Critical Illness Quotes with Diabetic Life

Most people believe critical illness cover is an insurance product they will never need or simply cannot afford. However, the majority of us are far more likely to claim on a Critical Illness Cover policy than a Life Insurance Policy.

To protect you from many serious illnesses, a critical illness policy can be taken out alongside life insurance cover or can be bought individually. It is similar to serious illness cover and the expert advisors at Diabetic Life can assess your circumstances and advise on the best options for you.

If you ever need to claim against your critical illness cover, it pays out as a tax-free lump sum or an income when you need it most.

Additionally, some policies will also pay out if your children become seriously ill and you have to take time away from work to care for them.

Conditions Covered By A Critical Illness Cover Policy

Your chosen policy will define what specific conditions it will cover. However, most policies will also provide cover in the event you are involved in an accident, suffer an injury, illness, or become permanently disabled.

Below are some of the medical conditions most Critical Illness Cover policies will cover against:

  • Most cancers
  • Multiple sclerosis
  • Heart attack 
  • Stroke Kidney or liver failure 
  • Major organ transplant

As well as the above, plans can cover additional conditions and provide cover tailored specifically to your children.

Sadly, there are numerous illnesses and disabilities that may affect us at any point in our lives. While it is possible to find Critical Illness Insurance that covers most medical conditions, it would be tough to find a policy that covers absolutely everything. For instance, some policies may only cover ten or twenty major illnesses whereas others may cover over a hundred of them.

With so many options available, it can be confusing finding the right cover for you. Using a specialised insurance broker such as Diabetic Life means we will search, find and compare policies to match you with one that is suitable for your lifestyle and budget.

While some people may think the most sensible option would be to select the most expensive cover, therefore covering all outcomes, you will only be able to claim on some illnesses if they are in the advanced stages or if they will result in permanent symptoms.

As well as checking the specifics with insurance providers, we can help you personalise your cover, adding extra specific illnesses to the policy if it is something you are particularly worried about, such as a hereditary condition.

Part of the application process involves providing details about your medical history and in some cases, your family history too. This may be in instances where you have a particular medical condition that runs in your family and are therefore deemed high risk by the insurer.

It’s important that you provide accurate information, even though it may be tempting to omit details in the hopes of paying less on your insurance. However, it is likely that an insurer will void any future claims you make if they discover the information you provided was false.

What Critical Illness Policy Covers

A Critical Illness Cover policy is an additional level of cover beyond your standard Life Insurance policy, designed to cover you if you become ill or injured. In the event you need to claim your policy, it will pay out as a tax-free lump sum to cover things such as:

  • Hospital fees / medical treatment 
  • Cost of living expenses 
  • Mortgage / rental payments 
  • Adapting your home

The Costs of Critical Illness Cover

The costs involved with Critical Illness Cover are dependent on a number of factors. As everyone has unique circumstances, we take all these details into account when applying on your behalf for a critical illness policy. Some of the questions you may be asked include:

  • Your age
  • Current health
  • Your weight
  • Medical history
  • Family history 
  • Whether or not you smoke 
  • Sum assured / term 
  • The amount of cover you wish to take out 
  • Your employment details

You will be asked about your job because some occupations carry a higher risk than others. If you are in what is considered a high-risk job, you may have to pay a higher monthly premium in comparison to someone who works in an office or has a home-based job.

However, it is possible to adapt your Critical Illness Cover policy to make it within your budget. Even if the level of cover is particular to you and your circumstances, you can cut back if the premiums are not affordable. Diabetic Life will be on hand to guide you through the various options available, providing you with several quotes to give you the best level of cover to fit your budget.

On top of this, there are certain changes you may be able to take that could reduce your premium costs if they are exceptionally high. These will include trying to live a healthier lifestyle than your current one by doing things such as lowering your BMI or quitting smoking.

How Critical Illness Cover Works

Understanding how critical illness policy works will help you make an informed decision when choosing what insurer to go with. Diabetic Life can also help you find the best policy for your needs and your budget requirements.

Critical Illness Cover gives you the freedom to choose the length of the policy, with many people opting for cover until they no longer have financial dependents. For example, when their children have grown up and move out.

Other people keep their critical insurance cover until they have paid off their mortgage, so they know they’ll be able to keep up on payments if something were to happen to them.

You may go your entire policy term without needing to claim your insurance, but much like with car insurance, it is the peace of mind you need if something happens.

Claims are taken on your Critical Illness insurance when you are diagnosed with an illness or have an accident which means you are unable to work for a period of time.

When you first set up your cover, you’ll need to decide whether you want to take out level, increasing or decreasing cover.

Increasing Cover

With this type of cover, the amount you can claim and the amount you pay monthly increase annually. This is done to protect against inflation and is a good option for people with families who want to ensure their salary and other living costs will be covered by the claim’s payout.

Decreasing Cover

Decreasing cover’s value goes down each month but what you pay stays at the same rate. This type of cover is beneficial if you want to use your payout to cover any debts or loans you pay off monthly, such as a mortgage.

Policy Length

Usually, your policy will end once you’ve made a claim.

If you never need to make a claim, you can continue paying for it until you no longer feel it is required. This could be for reasons such as those outlined above, maybe your children no longer live at home, or you’ve paid off your mortgage. Other people may cancel their policy because they are retired and are no longer working.

It is worth mentioning that Critical Illness Insurance does not usually payout if you pass away. If you are looking for insurance that will ensure your family is looked after in the event of your death, a life insurance policy is the best option.

Whether you have a medical condition, dangerous condition or even a hazardous hobby, Diabetic Life are specialists in life insurance and we can help find a policy that covers for all eventualities.

The Best Time to Buy Critical Illness Cover

As with life insurance, the best time to buy Critical Illness Cover is when you are younger. Premiums tend to be more expensive as you get older, and full cover may not be available.

If you have a pre-existing medical condition, it may be harder for you to obtain Critical Illness cover. However, each case is individual, with this type of cover being underwritten at the point of application, dependent on what your pre-existing condition is and its severity.

Paying Tax on Critical Illness Insurance

With Critical Illness Insurance, you don’t need to worry about being taxed for any funds you receive following a claim.

These types of payments are not classed as income, and therefore, you will not pay income tax on the money received from the insurer.

It is important to note that if you and your partner take out joint life insurance, in addition to critical illness policy, the payout from a claim becomes part of your estate if you die before receiving it. Unfortunately, this means your family may be faced with an inheritance tax bill.

Depending on the value of your estate, you could be charged inheritance tax on the payout. Currently, this is only if your estate is valued at more than £325,00, but this can be avoided if you write your insurance policy in trust, meaning it is classed as being outside of your estate.

The Differences Between Critical Illness Cover and Terminal Illness Cover

Terminal illness cover pays out when you are first diagnosed with a terminal medical condition. In contrast, critical illness cover can be paid out for instances where you cannot work due to an accident.

Critical illness cover does protect you if you are diagnosed with an illness that is not necessarily fatal, providing cover during the term you are paying for.

The Differences Between Critical Illness Cover and Income Protection

People tend to confuse the two as they both payout in the event of an illness. While you will receive a lump sum of money if you cannot work and have critical illness cover, income protection provides a regular portion of your income during the period you cannot work. These payments will continue until you pass away, retire, or are declared fit to return to work.

It is worth considering your own lifestyle and expected outgoings when choosing between the two. If you are diagnosed with a long-term illness that requires treatment for a longer time, you may want to consider Income Protection.

Both policies have their benefits, and their suitability depends on each individual and their circumstances. Critical illness cover will be slightly more expensive on a monthly basis but maybe the better option for you. You could even take out both to provide maximum cover if your budget allows. In the eventuality that you need to choose, the team at Diabetic Life will be on hand to help.

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