Critical Illness Insurance

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What is critical illness insurance?

Critical Illness Insurance is a policy that is designed to pay out if you are diagnosed with a serious condition – such as cancer, a stroke or heart attack – which effects your ability to work.  The illness definitions list described in the policy can vary, so choosing the right provider and product terms is important.

Pre-existing medical conditions tend to be excluded from the policy, and the medical history of parents may also push premiums up if there is a presence of hereditary diseases, however some insurers will make exceptions.  The payout is a tax-free lump sum.

The main benefit of Critical Illness Insurance is that the payout is made to you whilst still alive and undergoing treatment. You have the freedom to do as you please with this money, for example, it could be used to pay for treatment, pay the mortgage off or make amendments to your home to help you cope better with the debilitating condition. Essentially, the policy is designed to make your life easier while you are going through a tough time.

If you have a combined critical illness and life insurance policy, it will only pay out once – you wouldn’t receive a lump sum upon diagnosis of the critical illness, and then again, should you die during the term of the policy.

The earlier Critical Illness Insurance is taken out the better – you will be younger and in better health, so therefore less likely to contract a serious illness, and as a result, your monthly premiums will be lower.

For more information, please get in touch.

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