Critical Illness Insurance
Critical illness insurance provides a tax-free lump sum if you're diagnosed with a serious illness covered by your policy. This financial support can help cover expenses like mortgage payments, medical treatments, or daily living costs during recovery
Is It Worth It?
1
Existing Coverage
Check if your life insurance, mortgage, or employer benefits already provide critical illness cover.
2
Policy Exclusions
Understand what isn't covered. For example, some policies may not cover certain illnesses or conditions
3
Cost
Premiums vary based on age, health, occupation, and coverage amount. On average, a combined life and critical illness policy costs around £34.52 per month in the UK.
4
Cost vs. Benefit
Critical illness insurance can be invaluable if you don't have sufficient savings or other coverage to manage a serious illness. For instance, Carla Jefferson's £12-per-month policy provided £50,000 after her cancer diagnosis, helping her avoid financial hardship.
Factors Influencing Life Insurance Costs
Other than Coverage Amount and Term: (Higher coverage amounts and longer policy terms typically result in higher premiums), the factors identified below include the cost of insurance.
Age
Younger individuals generally pay lower premiums. For example, a 30-year-old might pay approximately £34.58 per month for £100,000 of level-term cover, whereas a 50-year-old could pay around £69.89 per month for the same coverage.
Health
Pre-existing medical conditions can increase premiums. Insurers assess your health history to determine risk.
Lifestyle Choices
Factors like smoking, alcohol consumption, or engaging in high-risk activities can lead to higher costs.
Considerations When Purchasing Critical Illness Insurance
1
Assess Your Needs, Regularly
Evaluate your financial obligations, such as mortgages, debts, and dependents' living expenses, to determine appropriate coverage.
Review Regularly your cover in line with life events such as marriage, having children, or changes in financial circumstances may necessitate adjustments to your coverage.
2
Compare Policies
Obtain quotes from multiple providers to find a policy that offers the best value for your needs. Comparison websites can be helpful in this process.
3
Understand Policy Details
Be aware of the policy's terms, including coverage limits, exclusions, and the claims process