Archive for the ‘ Critical illness insurance ’ Category

By Steven Keogh

Differences between income protection cover and critical illness insurance make both products invaluable in today’s economic climate, so we have put together a key comparison to help you decide which option is best for you.
Insurance comparison

Regular Payments vs. Lump Sum

Though both income protection and critical illness will provide you with a pay out should you by unable to work due to illness, the type of payout will depend on the policy you choose.

Income protection is designed to actually protect your level of income and will pay out a regular lump sum for a fixed length of time so that you can maintain your standard of living.

Conversely, a critical illness payment is usually one tax free lump sum that is issued on diagnosis and no further payment will be made for this specific condition.

Illness vs. Unemployment

An income protection plan will not only pay out if you are unable to work due to illness, it will also be valid if you loose your job through accident or redundancy.

If you are able to work in another role or at a reduced rate, an income protection policy will continue to be valid and supplement your income to the level agreed.

When it comes to a critical illness, you do not have to be unable to work for a payment to be issued. Such cover will become valid on diagnosis of a recognised condition no matter what your employment status. It does not matter how much income you receive, the payout level will be the same.

Immediate Payment or Deferment

Most income protection policies will have a period of deferment before the regular tax free amounts start to be paid. This can be anything from one month to up to two years depending on the agreement made at the start of a policy.

Conversely, a critical illness payment will be made as soon as a diagnosis has been confirmed and will then not pay out again until another eventuality arises.

Value of the Cover

When you take out a critical illness policy you can set the amount of payout at any level you see fit. The higher the payout, the higher the premium but there is no cap on the amount you can set. This makes critical illness insurance ideal for covering a fixed level of debt such as mortgage, which you would want paid off should you be diagnosed with a serious illness.

When you take up an income protection plan the payment is intended to cover your standard monthly outgoings. Such a policy will usually set a level of approximately 60% of your gross monthly salary, which should equate to a standard net monthly income.

The differences between income protection cover and critical illness insurance remain constant but the details of each individual policy may change. Before you choose any new insurance product make sure you read the small print so that you can be sure you get exactly what you are looking for.

Need help?

If you would like any help or advice on which insurance is most suitable for you then please call one of our friendly advisers on Freephone 0800 799 9330

There are many advantages of Critical Illness Cover as a form of Life Insurance, however, it’s important to understand why there’s the need for an additional private healthcare insurance policy in the first place. In the UK many people rely on the state to look after them in the event that a health issue arises. A person also hopes that an employer understands, should an illness suddenly develop, and that their position in the company will remain open.

Critical illness coverOnce an illness is diagnosed, especially one that is life threatening, many will worry about the illness itself rather than having to pay the bills or trying to stay in work. The stress of a sudden diagnosis can affect people mentally but it’s the financial strain that many forget to insure against. Indeed it’s said more people have insurance for their pets rather than critical illness cover for themselves.

Both aspects of life insurance cover and critical health insurance are a form of protection for you and your family. Whereas the former pays out a lump sum of money should you pass away and will help your family financially. The cover won’t help you in the event anything occurs before you die. This leaves the policy itself a little wanting.

The Benefits Of Critical Illness Cover
The benefits of having specific insurance cover should you be diagnosed with a serious illness far out weigh any reliance you have on the goodwill of an employer, or that of relying on the state to keep you and your family financially secure in the short term. Critical illness insurance provides for a cash pay out when an illness as described in the policy details is ascertained.

Life cover is a hidden reality of the modern age. The important part of any insurance policy is to ensure it benefits you or your loved ones when required. Statistics suggest that one in three people will be diagnosed with a type of cancer. The cover also pays out on heart attacks, stroke or kidney failure. It’s worth comparing illness insurance, some insurers pay out only on severity, others a percentage of the lump sum due depending on a sliding scale.

While not many wish to consider becoming ill and claiming, the ability to pay the bills, the mortgage, receive an income for the duration will obviously be of help and that’s exactly what critical illness cover aims to achieve. There’s surely a kind of irony that one would only insure one’s self against death and not an illness which you may well recover from and live several years after any serious illness diagnosis is given.

Critical health insurance can be merged with other insurance policies to provide better cover for your situation. While a lump sum is typical, an insurer can also payout an income over a given period or pay an amount to reflect the decreasing term on a mortgage. Once again, life insurance only pays out a lump sum on your death, a critical illness insurance policy helps you and your family get through a tough period while you fight to stay alive.

There is however, one more point when considering an insurance policy to cover serious illness and it stands out as a reminder to always read the terms and conditions of any policy. Some critical illness insurance policies only payout if you survive 28 days after diagnosis. In which case, there’s an argument for having both types of insurance running simultaneously.

Life Insurance Premiums To Rise In 2013

The ongoing cost of both health and life insurance could rise by up to 30% in 2013 as a set of newly created tax rules are fully expecting to hit insurance profits.
Life Insurance Premiums Set To Rise
For the first time in over an estimated 10 years, the cost of life insurance is expected to rise significantly.

Because of this, many financial advisors and insurance brokers are advising people that if they need cover then they should buy it before the prices rise.

It has been widely reported that new European legislation which is due to come into force at the end of this year will make it compulsory for all insurers to offer unisex rates on all types of insurance including critical illness cover. This is expected to significantly increase the cost of insurance for women as their premiums are usually less as they are more likely to not die early and therefore make a claim on their insurance policy.

What a lot of people won’t realise is that new tax rules will be rolled out and implemented at the same time which will force up the cost of insurance right across the board and any gains which men might see from potentially cheaper unisex rates will effectively be wiped out by the new tax.

At the moment, UK insurance providers are permitted to offset any costs of their life insurance business against any profits which they have made on their investments. However, during the last budget it was announced that a new legislation was to be introduced which will effectively close down this loophole.

Whilst this may provide more tax for the treasury, it is likely to increase insurance costs for life insurance providers which in turn is expected to be passed on to the consumer.

Critical illness insurance

With the population now living longer than ever before, we find that many of us will suffer from or be diagnosed with a critical illness at some point in our lives and with the advances of medical science, more and more of us are now surviving these illnesses.

This is where Critical illness insurance becomes important because where life insurance covers you in case you die, it will not cover you should you have a heart attack, stoke, brain tumor or be diagnosed with cancer for example and survive. These illnesses can severely compromise your income and may force you out of work and remove your income all together.

With a critical illness cover policy in place, you will receive a lump payment to settle any debts, mortgage etc and should you need any modifications applying to your home such as a stair lift etc then this can also be funded by your policy.

The best way to obtain your critical illness insurance quotes are through an independent online insurance broker such as

Many life insurance policies have the option of Critical illness cover at little extra cost so this is always worth considering when shopping for life insurance and if you already have a life insurance policy than you should enquire about critical illness insurance as you may be able to simply add it to your existing life insurance policy.