Critical Illness Cover

By Author: Lecia Selbo
Total Articles: 49
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Just over 22% of the British population will suffer a serious illness before they reach retirement age. The financial pressures caused by the resulting loss of earnings can be extra stress in what is already a difficult time. Critical Illness Cover (CIC) is a form of insurance that is designed to help deal with your financial duties in just such a situation.

CIC policies cover for many of the major illnesses, though they vary a little from lender to lender. All policies will include: cancer, heart attacks, kidney failure, MS, strokes, organ transplants, and heart bypasses and will also pay out in the event of the policyholder suffering a permanent disability and possibly some other, less common illnesses.

That is not to say, however, that all conditions are covered. Most policies will not pay-out for tumours that have not yet invaded organ or tissue, and HIV/AIDS is also often not covered.

Just because a certain policy doesn''t cover as many illnesses as another doesn''t necessarily mean that it''s a bad idea. Some policies that cover just about every illness are simply an excuse for the lender to make more ...
... money, they''ll be covering you for yellow fever (for example) but the chances of you contracting it and them having to pay out are relatively low.

With so many forms of life insurance and illness cover around it can be difficult to distinguish between them. CIC is distinct in as much as it offers one, large, tax-free lump sum to deal with any financial responsibilities on the event of the policyholder being diagnosed. It''s a particularly good idea for single people with no dependents, as the lump sum can deal with all immediate financial issues whereas life insurance may be less relevant due to the policyholder not having any dependents.

Of course, CIC is a good idea for anyone, particularly if they are the main earner in the household. There is also nothing to say that you can''t have life insurance and CIC, and many lenders will probably try and sell you one when you take out the other. Although they do cover different eventualities, make sure you check the small print as there''s little point paying for the same coverage on two different policies (for example, both life insurance and CIC may offer to pay off the mortgage).

Another thing to consider with CIC is that the earlier you take out the policy, the better. Medical technology is always improving and therefore always growing more expensive, some lenders have already put up their premiums massively, and as technology increases the premiums will just keep rising.

A final note is to make sure that you get a policy that pays out quickly in the event of you falling ill. Some policies will wait for six months to a year, and if you are ill you need to get your money as soon as possible. If you need further advice, take a look at the Association of British Insurers website, this will give you the full list of illnesses that all policies must cover and some extra pointers of what you should look for in your policy. Lecia Selbo took out critical illness cover with Legal