Critical Illness Cover – Frequently Asked Questions
What does Critical Illness protect against?
Critical Illness Cover pays out a cash sum when you are diagnosed with one of many specified illnesses. All insurance providers cover three basic conditions: cancer, heart attack and stroke. However, each provider’s definitions and lists of illnesses vary, so it is always important to check what is and isn’t covered before you take out a plan.
Do you need Critical Illness Cover for your mortgage?
There is no obligation to purchase Critical Illness insurance when you take out a mortgage. However, many people would struggle to continue paying off their mortgage if they were diagnosed with a serious illness. There are significant benefits to having enough Critical Illness Cover to pay off that mortgage in such an event.
If you would like to find out whether mortgage protection would be beneficial and cost-effective for you, then why not consult with us.
What is a non-qualifying Critical Illness plan?
Qualifying policies benefit from improved tax treatment, but must meet stricter requirements than non-qualifying policies. Critical Illness policies that are non-qualifying still pay the cash lump-sum free of tax. The key difference in taxation comes in if a large surrender value is cashed-in from a non-qualifying policy. However, this issue is unlikely to arise if you are taking out a plan purely for protection reasons.
Critical Illness Cover – Is it worth it?
The risk of being diagnosed with a Critical Illness unfortunately cannot be overestimated. According to Cancer Research UK, around one in two people will develop cancer in their lives. Furthermore, clients are six times more likely to make a claim under Critical Illness insurance than under life insurance.*
Whether Critical Illness Cover would be beneficial to you depends on a number of factors – your age, your medical history, how much cover you would need, and more. For a full analysis on what kind of cover would be best for you and your family, please make contact.
Money in Person would be happy to discuss your protection needs with you. Just give us a call to arrange a free consultation.
*(Source: Legal & General 2018 claims figures)