Definition of Critical Illness Cover
The Association of British Insurers (or ABI) recently proposed a document known as the “Statement of Best Practice for Critical Illness Cover.” The document says that a critical illness cover plan will pay out a lump sum figure if you should meet the definitions of the following illnesses: stroke, cancer, and heart attack.
If you meet the definitions of these illnesses and acquire one of them during the term of the policy then your insurer will be required to pay out a lump sum at that time.
Cancer, heart attack, and stroke aren’t the only illnesses with these types of policies; however, the list may vary between each insurance provider. This is why it’s important to seek the knowledgeable advice of an insurance adviser.
The ABI has put together a list of extensive definitions used to model critical illnesses so that everyone is clear in this matter. These 23 definitions are what have been included in the Statement of Best Practice for Critical Illness Cover.
These 23 definitions include things like aorta graft surgery (for disease), Alzheimer’s disease, blindness, coma, deafness, heart attacks, HIV infection, among others. Most of the illnesses have specific details relating to the severity of the illness. For example, kidney failure is listed but only if it requires dialysis.
Another example is Multiple Sclerosis (MS) but only if the symptoms are persisting.
By using the life insurance provider’s Key Features document you can review specific sections of your policy. This will help you compare the polices of a number of different life insurance companies and allow you to find the best deal on the illnesses that you want covered.
A lot of UK residents choose to purchase critical illness cover for their children, which would pay out at around 25% of the policies sum assured. These children’s policies are usually capped at a certain amount though.
Some critical illness cover policies will include a waiver of premium that covers the payments if the policy owner falls ill and is not able to work. Usually this is an additional premium to your regular policy.
When purchasing a Critical Illness cover policy its good to look out for a few things. For example, there may be exclusions used in the policy for things like drug and alcohol abuse, hazardous sports, living abroad, and things like criminal acts and self inflicted injuries.
Many insurance companies will use similar specifications and will have their own exclusions so make sure you know what you’re getting into. One of the exclusions that are very commonplace is non-disclosure of medical information, as it might affect your critical cover policy. If you lie to the insurance broker and they find out later you or your family may get nothing and the insurance company usually takes these matters very seriously. It is always better to just tell the truth.
You can usually bundle your insurance products together to save money. So a normal package would include life insurance cover, Permanent Health Insurance, and Critical illness cover. All of these things might not be necessary for your specific needs but a lot of people would rather be safe than sorry.
Learn more about critical illness cover. Stop by Vern Eaton’s site where you can find out all about how to compare critical illness cover prices in the UK.
