There Are Some Illnesses More Critical Than Others

Summary

The factors you should think about when choosing critical illness cover and the rangeof companies offering thissort of policy.

Your mortgage provider may give you quite a few financial products together with critical illness cover. But, as they are not specialists in this field, you will most likely find a better deal somewhere else.

The level of cover on offer is just as vital as the premium when looking forcritical illness cover. The policies from Nationwide and Alliance and Leicester are awfully restricted says a senior adviser at LifeSearch, a telephone and online life assurance broker. Liverpool and Victoria covers only seven critical illnesses, with Norwich Union covering just 10, whereas the market leader, Swiss Life, covers 39.

Parkinsons, Aids, loss of speech, deafness, blindness and diabetes are some of the conditions not covered by some of the High Street names. The advisersays that it is not worth thinking abouta policy, which insures less than 25 conditions.

An umbrella term incorporated in all policies is ‘total and permanent disabilities’, this term means you are insured for any illness, which stops you from working permanently.

You neeed to be aware of the wording as some policies cover ‘any occupation’ while other policies only cover your ‘own’ occupation. You will not receive a payout under a ‘any occupation’ policy unless you are totally incapable of carryingout a job, however unskilled. Consequently The senior adviserrecommends you sign up for a ‘own’ occupation policy.

There are a range of companies as well as Aviva who offer comprehensive insurance including Legal and General, Norwich Union, Standard Life, Scottish Equitable, Scottish Provident, Friends Provident, Liverpool Victoria, Skandia and Zurich Life.

For many years life insurance  has been sold by a mortgage company. This has resulted in critical illness cover never being considered by many people. There are four times as many claims on critical illness insurance compared to life insurance, when the client has taken out both types of policies.

Life insurance cover is really important, specially if you have dependents, as they will welcome the lump sum settlement on your death. However critical illness cover ought to be the priority if you have debts to settle, above all a home owner loan. The Directorconsiders critical illness to be essential as it covers the cost of your house and food, even if you are ill and unable to work.

The monthly payments will be larger if you are a smoker or heavy drinker and will also be more expensive if you are older. A decreasing term policy, which is targeted at people only wanting to cover the cost of their home owner loan, is the cheapest.

One of Spencer Knight’s customers, a 27 year old non-smoker, who wanted100,000 pounds cover from a critical illness, long term policy, was given a price of 14 pounds 40 pence per month, which rose to £25-50p for smokers. However a senior adviserfrom Tesco Finance recommended a policy, which gave both life insurance and critical illness cover for £16-60 a month, so it could be worth paying a bit higher premium.