The Association of British Insurers (or ABI) recently proposed a document known as the “Statement of Best Practice for Critical Illness Cover.” The document says that a critical illness cover plan will pay out a lump sum figure if you should meet the definitions of the following illnesses: stroke, cancer, and heart attack.
If you meet the definitions of these illnesses and acquire one of them during the term of the policy then your insurer will be required to pay out a lump sum at that time.
Cancer, heart attack, and stroke aren’t the only illnesses with these types of policies; however, the list may vary between each insurance provider. This is why it’s important to seek the knowledgeable advice of an insurance adviser.
The Association of British Insurers (ABI) has created a list of specific definitions that insurance companies must use as a model for critical illnesses. There are 23 definitions that they use for their ‘Statement of Best Practice’ regarding critical illness cover in the United Kingdom.
These 23 definitions include things like aorta graft surgery (for disease), Alzheimer’s disease, blindness, coma, deafness, heart attacks, HIV infection, among others. Most of the illnesses have specific details relating to the severity of the illness. For example, kidney failure is listed but only if it requires dialysis.
Another example is Multiple Sclerosis (MS) but only if the symptoms are persisting.
A good way to compare policies with different providers is by reading their Key Features Document and checking which illnesses are covered with which policies. One extra option that a lot of providers include with these policies is Total Permanent Disability as an illness.
Many citizens of the United Kingdom buy critical illness insurance for their children because it will pay out a portion of the policies sum assured. Children’s policies are usually capped but a lump sum payment could help your child deal with the repercussions of a severe illness.
Another benefit that is usually included is a ‘waiver of premium’, which can cover payments when you fall ill and can’t work. Adding this onto your policy will often increase the costs though.
Being prepared and informed when buying any life insurance policy is important and especially critical cover. Its good to know about all of the possible exclusions that might be involved for things like dangerous pastimes and sports, drug abuse, alcohol abuse, criminal acts, self injury, and even things like living abroad. The idea is that living abroad may be dangerous to your health.
Before you sign a policy you should make sure that you know the risks because exclusion could mean that you receive nothing – and for that reason there may be no point in purchasing insurance in the first place. Speaking to a knowledgeable adviser should solve that problem though.
You can usually bundle your insurance products together to save money. So a normal package would include life insurance cover, Permanent Health Insurance, and Critical illness cover. All of these things might not be necessary for your specific needs but a lot of people would rather be safe than sorry.
Want to find out more about critical illness, then visit Vern Eaton’s website today.