An Introduction to Critical Illness Cover

Whilst scientists have made great steps in recent decades improving length and quality of life, as people are living longer so they are more prone to develop what is know as a ‘critical illness.’ Such illnesses can incur significant secondary treatment costs, require improvements or amendments to housing, and include costs for care.

They also can result in the main earner from a house suddenly finding themselves unable to work. Legal and general critical illness cover, and similar policies, are designed to protect against all of these eventualities, allowing the policy holder to concentrate on the most important thing: recovering their health, without having to worry about the financial implications of their condition.

How Does It Work

Critical illness cover works like any other form of insurance, at least initially. You pay a set amount depending on your underlying health and habits when the policy is taken out. In return you receive a lump sum, or regular payouts in the event of you developing a critical illness. With most policies these payments will continue for the rest of your life, although some will have set time spans, so if you’re considering getting such a policy, make sure you check.

What Is Covered

The UK market is extremely well-regulated when it comes to critical illness cover, and the Association for British Insurers has a list of illnesses and a code of best practice when it comes to the selling and provision of critical illness cover. The list of covered illnesses is constantly being reconsidered depending on medical advances in the treatment of certain diseases. Additionally, each provider will cover for a different number of these illnesses, with some policies paying out a different amount of the value of the policy for the severity of the condition.

The original four illnesses that were covered by CIC were heart attack, heart bypass, cancer and stroke, and these remain the most common illnesses.

How Is Diagnosis Agreed

This varies slightly from provider to provider, but in general most companies will require the agreement of at least two independent medical experts. In some cases companies will have a list of doctors that they know and trust, so you may need to get an assessment from one such expert.

How Are Premiums Calculated

Exactly like life insurance premiums. At the time of taking out the policy you will have a full and comprehensive assessment of your lifestyle, people who are active, don’t drink much and don’t smoke will have to pay less for their premiums than someone with a sedentary lifestyle who smokes a lot.

Is It Worth It?

Ultimately, that decision is up to you, however, if you’re still in full-time work and/or have a dependent family, then it’s very important, perhaps more so than life insurance. Obviously, individual circumstances vary, but it’s certainly worth considering carefully.


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