Do you have critical illness cover? Are you sure?

As part of an initial client meeting I always ask what protection policies are in place. This could be work benefits (such as sick pay or death in service benefits) or standalone policies (such as life cover, critical illness policies).

Quite often, clients with a life insurance policy believe they have a life and critical illness policy. This is quite often not the case and the confusion stems from a clause in most life insurance policies called “terminal illness cover”.

Terminal Illness or critical illness – what’s the difference?

A life insurance policy with terminal illness cover will pay out if a doctor states an illness is not recoverable and that you are expected to die within a set period (normally within 12-18 months of diagnosis). If this happens the policy simply pays out early.

Critical illness insurance is different. It pays out based on the diagnosis of a pre-defined illness. The main claim areas for critical illness are cancer, heart attack and stroke

These events are much more likely to be diagnosed than a terminal illness. Importantly, you will still receive the money even if you make a full recovery. From speaking to clients this is the cover many clients think they have when they take out a life insurance policy with terminal illness cover.

Why take critical illness cover over pure life insurance?

Ultimately, it is more likely to happen. According to research carried out by Cancer Research UK, there is a 50% chance that a person diagnosed with cancer will live for 10 or more years.

Serious illnesses can often have a long-lasting impact. Depending on the type of cancer you are diagnosed with, would you need to modify the house to make things easier? Would you need to pay for care? Would you want to pay off the mortgage and reduce your hours at work? Critical illness cover could provide you with the option to do this.

What should you do?

Check your policies – you might not be covered for what you think you are. If you have any questions about your policies, please get in touch. We offer a free initial meeting and, if you take out a critical illness policy, we will receive a commission from the insurance company (so you won’t pay us any fees).