What is the Difference Between Critical Illness Insurance and Terminal Illness insurance?
Critical Illness Insurance is much more comprehensive than Terminal Illness cover.
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- Where can I find help?
- To help you find your question, we have organised our FAQ’s into relevant groups. Answers to all sorts of more general questions are found in the General Questions section.
- Should you consider Mortgage Life Insurance instead?
- Only if you have a Repayment Mortgage and want insurance cover for it.
- 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 Terminal Illness Insurance?
- You probably won’t need to - most policies include Terminal Illness cover free of charge on all Life and Critical Illness policies.
- 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).
You can claim under Terminal Illness cover if you are diagnosed with an illness from which a Doctor confirms that you are expected to die within 12 months of diagnosis. Terminal Illness Insurance cannot be purchased as a stand-alone policy – it is always sold in combination with another policy.
Terminal Illness cover is usually included free of charge within all Life and Critical Illness policies.
But please be aware, Terminal Illness and Critical Illness cover are not the same.
Critical Illness cover is much more comprehensive.
Consider what would happen, if you had a heart attack or became blind. Many heart attack victims can expect to survive for years and blindness does not usually affect life expectancy. So, whilst you have to give up work, you cannot claim under your Life and Terminal Illness cover because you are 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.
Critical illness cover is defined as an insurance which pays you a tax-free sum of money if:
- you are diagnosed as having a serious or chronic illness,
- or terminal illness which is listed on your policy,
- or require a specific type of operation which is listed on your policy
- or you suffer from any condition or have an accident that totally and permanently prevents you from working.
Now consider the fact that 1 in 5 men and 1 in 6 women suffer a critical illness before their usual retirement age.
We hope you will now appreciate the advantages of Critical Illness Insurance and the difference between Critical and Terminal Illness Insurance.
Frequently Asked Questions related to the above topic.
Click below if you wish to read them: -
- You have a Repayment Mortgage. What sort of Life Insurance do you need?
- You have an Interest Only Mortgage. What sort of Life Insurance do you need?
- Life Insurance - why do you need it?
- How quickly will your application be processed?
- Is there any investment value in your policy?