Some Illnesses are more Critical than Others

Summary

The factors you should consider when choosing critical illness cover and the varietyof companies tendering thissort of policy.

Your mortgage lender may propose several financial products including critical illness cover. However, as they are not experts in this market, you will almost certainly find a superior offer somewhere else.

The amount of cover on offer is just as vital as the premium when looking forcritical illness cover. The policies from Alliance and Leicester and Nationwide are particularly limited says an adviser at LifeSearch, a telephone and online life assurance broker. Standard Life covers only eight critical illnesses, with Friend Provident covering just 10, whereas the market leader, Aviva, covers 39.

Blindness, deafness, loss of speech, diabetes, Parkinsons and Aids are some of the illnesses not covered by some of the Insurance companies. The advisersays that it is not worth consideringa policy, which insures less than 24 ailments.

An umbrella term incorporated in all policies is ‘total and permanent disabilities’, this term means you are covered for any ailment, which prevents you working ever again.

You must be watchful of the wording as some plans cover ‘any occupation’ while others only cover your ‘own’ occupation. You will not receive a settlement under a ‘any occupation’ policy unless you are utterlyunable to carryout a job, however menial. For that reason The senior adviserrecommends you sign up for a ‘own’ occupation policy.

There are many companies as well as Aviva who offer full insurance including Standard  Life, Norwich Union, Liverpool Victoria, Scottish Provident, Scandia, Zurich Life, Friends Provident, Scottish Equitable and Legal and General..

For years life insurance   has been sold by mortgage companies. This resulted in lots of people never buying critical illness insurance. There are four times as many claims on critical illness insurance compared to life insurance, when the consumer has taken out both types of policies.

Life insurance cover is extremely important, particulary if you have family, as they will welcome the lump sum settlement on your death. On the other hand critical illness insurance should be the priority if you have debts to settle, above all a home owner loan. The senior adviserconsiders critical illness to be vital as it covers the cost of your living expences, even if you are sick 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 intended for people only wanting to insure the cost of their mortgage, is the cheapest.

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

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