Should you include Critical Illness cover on your Life Insurance policy?

STEP 1 of 2
Type of cover
Life Insurance       Mortgage Life Insurance
 
Cover Level (£)

Number of years
Do you want:  
Critical illness cover
Family income benefit
 

Hot Topics

What is Life Insurance?
Life Insurance is also known as Term Insurance.
Life Insurance - why do you need it?
You may want Life Insurance to provide some financial protection for the family or to cover the payment of an Interest Only Mortgage.
What is the difference between Life Assurance and Life Insurance?
Life Assurance has an investment value but Life Insurance does not.
How long should you insure for?
For mortgage protection purposes you should also insure yourself for the same number of years that are remaining on your mortgage. The initial sum insured should always equal the capital sum outstanding on your mortgage.
Should you include Critical Illness cover on your Life Insurance policy?
You should certainly consider taking out Critical illness cover whether you combine it into your Life Insurance policy (which is by far the cheapest way to buy both insurances) or you take out separate policies (which gives you far more protection – see below).
Please note that if you opt for a combined Life Insurance and Critical Illness policy then if the policy pays out because of Critical Illness, the policy it is finished and will not pay out again if you were to die.

If you want your Life Insurance to continue after a claim for Critical Illness, then you will need to take out separate Critical Illness and Life Policies. This will cost you more but you have, in effect, got a potential payout for critical illness AND another payout if you died whilst the Life policy was in force.

But what benefits will Critical Illness cover add to your Life policy? – if you want to know read on.

If you had Life Insurance with Terminal Illness cover (all the life policies we sell automatically include Terminal Illness cover at no extra charge) and you died, or were diagnosed with an illness from which your Doctor expected you to die within 12 months from the initial date of diagnosis, then your policy would pay out.

But what would happen, if you had a stroke or became blind? Many stroke sufferers can expect to survive for years and blindness does not necessarily affect life expectancy. So, whilst had to give up work you could not claim under your Life and Terminal Illness cover because you were expected to survive longer than 12 months. Critical illness insurance fills this gap. It pays out immediately if you are diagnosed with any one of a long list of critical illness included on the insurance company’s list of insured illnesses and conditions.

To put this in context, you should be aware that 1 in 5 men and 1 in 6 women suffer a critical illness before they reach normal retirement age. These risks are covered by Critical illness Insurance. Life Assurance

The following is a typical list of illnesses included within a comprehensive Critical Illness policy. Please note that the lists of qualifying illnesses does vary between insurance companies but the following is typical: -

  • Alzheimer’s disease
  • Aorta graft surgery
  • Aplastic anemia
  • Bacterial Meningitis
  • Benign brain tumour
  • Blindness
  • Cancer
  • Cardiomyopathy
  • Chronic lung disease
  • Coma
  • Coronary artery by-pass surgery
  • Creutzfeldt-Jakob disease
  • Deafness
  • Dementia
  • Heart attack
  • Heart valve replacement or repair
  • HIV or AIDs from an assault, blood transfusion, occupational duties or accident
  • Keyhole heart surgery
  • Kidney failure
  • Loss of independent existence
  • Loss of limbs
  • Loss of speech
  • Major organ transplant
  • Motor Neurone disease
  • Multiple Sclerosis
  • Paralysis/Paraplegia
  • Parkinson’s disease
  • Progressive Supranulcear Palsy
  • Stroke
  • Third degree burns
  • Total Permanent Disability
  • Cover for children

Frequently Asked Questions related to the above topic.
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