What is critical illness cover, and why is it so important?
Any one of us can unexpectedly fall ill at any given time. It’s a scary thought, but critical illness cover can offer some relief from the worry and dread, offering families affected some financial support in what must be one of the most difficult times in their lives.
However, with the mass number of illness covers available, it is important for those seeking critical illness cover (or those who already have it) to check the level of coverage they’ve selected meets their precise needs and protects them in the way they expect.
With this in mind, here are a few tips on managing your critical illness cover to give you the best chance of avoiding a costly mistake.
What is critical illness cover?
First things first - critical illness cover is a form of insurance that will provide financial aid in the event you are diagnosed with a serious illness or condition that affects your life in a significant way. Examples of illnesses or conditions covered in some critical illness insurance policies include, but may not be limited to:
● Heart attacks
● Strokes
● Certain cancers
● Multiple Sclerosis
● Serious head injuries
● Alzheimer's
● Parkinson's
● Organ transplants
If you are diagnosed with an illness or condition that’s covered in your policy, you will usually receive a single payout from your insurance provider that is meant to help you deal with the fallout of your diagnosis. This is particularly helpful if you’re unable to work and the payout may be used to make changes to your home, so that you’re more comfortable, or to cover loan or mortgage payments. The payout is completely tax-free, adding yet another sense of relief during a stressful time.
Why is critical illness coverage important?
If your life suddenly changes dramatically in the event you’re diagnosed with a critical illness, depending on your illness, you may struggle with even basic actions or movement, as well as struggling to cover basic monthly costs if you’re no longer able to work.
That’s what makes critical illness cover such a godsend - the cash payout will help you stay on your feet until you’re in a position to be able to support yourself and your family again. Otherwise, you may be forced to go into debt or take out large loans you’re unable to afford to stay afloat.
Choosing the right critical illness cover
Having the right level of critical illness coverage for your specific circumstances is essential if you hope to receive the financial support you may need. Here are some things you should consider before taking out critical illness cover to ensure you will remain protected when the time is right:
Assess your specific needs
When taking out critical illness cover, you should choose a level of cover that will offer the financial support you need to cover basic bills as well as any outstanding debts you have, like mortgage or other loan payments.
Other elements to consider are things like your lifestyle habits - if you work in a high-risk job where illnesses are common, or if you have a particularly dangerous hobby that may result in you falling ill - perhaps due to injury - critical illness cover may be a smart move.
It’s also a smart move if you have a history of illness within your family. If you know you are predisposed to developing a particular illness later in life, having critical illness cover may help should the unfortunate occur. Having said that, some providers may be hesitant to offer you the coverage you need if they’re aware of a common illness within your family, so you should discuss your needs with them in detail before taking out a policy.
Beyond this, factors like your age, general health, and future goals should all be considered.
Comparing policies and providers
Take time to research and review critical illness policies before you sign up for anything as the fine print and specific details of these policies can vary widely between providers and levels of cover.
When considering the cost, don’t always focus on the lowest-rate policies. These policies may be the most affordable, but if you want to benefit the most in the event you fall ill, you’ll often find the policies with the greater payouts - and the ones which cover specific illnesses - are more expensive.
You should also look into the reputations of insurance providers. Working with an experienced insurance expert can help you make the right decision and choose the provider - and policy - that’s right for you.
Understanding policy exclusions and limitations
Every critical illness insurance policy is different and you need to be aware of what is excluded from your chosen policy and instances where your coverage may not be as extensive as desired.
For example, as mentioned previously, pre-existing or hereditary medical conditions may not be covered by some insurers because the risk of them having to pay out in the event you fall ill is far greater than for someone who is otherwise unaffected by the illnesses in question. Self-inflicted injuries may not be covered, either, as well as specific medical treatments.
Managing your critical illness cover policy
Keeping your policy up to date
Updating your critical illness cover policy when necessary will ensure you can make appropriate changes to your policy to remain protected if certain events within your own life affect your existing policy in any way. For example, if you have children or get married, you may wish to increase your level of coverage to guarantee your loved ones are protected if you fall ill.
You should also review your level of coverage if your health status changes or if you make any significant lifestyle changes your insurer may wish to know about. If you begin working a new job that is considered significantly more of a health risk than your previous occupation, this is a good example of something an insurer would need to know, and they may wish to alter your coverage to prevent them having to payout more than they intended.
Protect yourself and your family with critical illness cover
Above all else, critical illness coverage is an investment in your and your family’s future. Choosing the right product for your needs is essential, which is why it is always advisable to partner with a reliable, reputable insurance product expert who can scope out the best coverage deals based on your exact circumstances. This will give you the best chance of having the coverage you need in place should something go awry, as well as avoiding the pitfalls of hidden or unclear terms and conditions.