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Critical illness insurance – what is it?

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Cancer statistics are getting worse every year. Cancer has already been one of the most common causes of premature death (in people aged 30-69) in 134 countries around the world for many years, and there is no indication that this situation is improving. These figures are downright frightening, and while we have not discovered a cure for cancer, we do have a way to protect ourselves from the financial consequences of serious illness. Let’s consider whether it is worth buying critical illness insurance, known in the UK as Critical Illness Cover (CIC).

Critical illness insurance – what is it?

In this article we explain critical illness cover insurance.
In this article we explain critical illness cover insurance.

We must point out at the outset – critical illness cover does not replace life cover, it complements it. With a critical illness policy, you will only receive a benefit when you are diagnosed with a specific illness, whereas a life cover policy is activated when you die. It is worth having both products, but be aware of the fundamental difference that exists between them.

In the simplest terms, critical illness cover is a product that protects you against the loss of your livelihood due to the diagnosis of an illness included in the insurance policy’s schedule. If you are diagnosed with a medical condition, the insurer will pay you a one-off benefit. Having cancer or undergoing a stroke, you may not be able to work and without a policy, you will find yourself in serious trouble.

What is very important, is that the sum insured you receive once you have fulfilled the conditions in the contract can be spent on whatever you want – of course, common sense dictates that these funds should be used for day-to-day living and medical expenses, but this is not required.

Payment of the Critical Illness Cover insurance benefit

In order to receive funds, you must submit a claim for payment of benefits (insurance claim). The claim must include the necessary medical documentation – the more information about the course of the condition the better. If the insurer does not find any deficiencies or irregularities, it will most likely make a positive decision to pay the insurance.

As we have already mentioned, you can use the funds you receive from the insurer for basically any purpose. Usually, the policy benefit is paid out within 4-6 weeks of the application, although we must point out that the whole process can be delayed if there are errors or omissions in the documentation. This means that it is still worth having at least a modest amount of savings prepared for a rainy day.

Types of critical illness insurance in the UK

Critical illness cover is a product offered primarily to adults, although there are also critical illness insurance policies for children. There are also differences between the policies in terms of the cover itself – the basic ones, cover a much smaller catalogue of illnesses eligible for benefit.

As a general rule, critical illness insurance covers a group of common illnesses – it is likely that any insurer will pay out after a diagnosis of leukaemia, myocardial infarction or stroke. However, there are rarer conditions and cases, such as atypical cancers, which are only covered by more expensive policies. When choosing critical illness cover with an insurance adviser from Extend Finance, pay attention to the diseases that are covered.

It also happens that critical illness insurance in the UK is an add-on to a life insurance policy. A combined policy, as this type of arrangement is called, is a very sensible choice because, in return for a slightly higher premium, your level of security is clearly increased. It is worth asking about these types of ‘hybrids’.

What conditions, among others, fall under critical illness cover?

There are dozens of serious medical conditions and their complications on the list (depending on the insurer and the package chosen). Critical illness policies virtually always include:

  • Malignant tumours;
  • Stroke;
  • Myocardial infarction;
  • Alzheimer’s disease;
  • Multiple sclerosis;
  • Kidney failure;
  • Parkinson’s disease;
  • Loss of sight;
  • Hearing loss.

However, it happens that the catalogue of diseases includes, for example, loss of fingers, third-degree burns or organ transplants.

When is it worth buying critical illness insurance?

In principle, this is whenever you are concerned about the onset of a serious illness, but especially so if you have a family. Your only obligation as an insured is to pay a monthly premium. The amounts do not have to be large, although they depend on a number of factors, such as:

  • Age;
  • Occupation;
  • Past medical history;
  • Smoking;
  • BMI.

We probably do not need to explain that cigarette smokers as well as those struggling with obesity will have to pay more for their insurance. Age is equally important. Anyone can take out an insurance contract – whether it is someone who has just turned 18, someone over the age of 50 or in some cases even a 75-year-old. Premiums very clearly increase with age, which of course corresponds to the increasing risk of illness.

In our opinion, it is advisable to take out insurance as soon as possible, because once you have been diagnosed with certain disease entities, your premiums will increase dramatically (often hundreds of percent per year). Furthermore, such a policy will most likely no longer cover the disease in question, which is not beneficial for people who have undergone cancer – the risk of recurrence is, after all, absolutely always there.

How do I choose the right critical illness policy in the UK?

Bear in mind that Critical Illness cover never covers absolutely every medical condition – there are fixed points, however, for some disease entities found in individual insurance policies. When choosing a policy for yourself, you should always analyse a number of quotes and it is definitely worth taking specialist advice when doing so.

It definitely makes sense to work with a broker – it’s completely free, and with an adviser you have to offer you the insurance that best suits your needs. By using Extend Finance, you save time and money, plus you get the peace of mind that your policy will be beneficial to you.

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Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

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Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

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