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| What
is Critical Illness Insurance? |
|
The name of this type of Insurance cover
can be slightly misleading and it would
probably be better described as Serious
Illness Insurance. It is often possible
to claim on the policy even if you were
to contract an illness that is not immediately
life threatening.
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| The vast majority
of critical illness insurance policies
cover the following illnesses: |
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The
definition of occupation: Some plans will
only accept a claim if you are unable to
do any work, it is normally more advantageous
to consider plans that provide cover against
you being unable to carry out your usual
occupation. |
|
Term
of the cover: whether this is for a fixed
term or throughout the remainder of your
life. |
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Waiver
of premium: Where the premiums to the policy
are suspended throughout the duration of
a claim. However the policy is continues
to be active and if you return to work the
policy, and the protection available from
it, is reactivated. |
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Index-linked
benefits: During the term of the policy,
the level of cover increases in line with
rises in your salary, a chosen index or perhaps
rises in general inflation. In these instances
the premium levels may also increase by a
similar rate. |
|
Fixed
premiums: the premium levels are fixed at
outset and remain the same throughout the
whole of the policy's term. |
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Deferral
periods: these represent the time periods
that you must be away from work, due to illness
or disability before the benefits under the
policy may be claimed. Deferral periods range
anything from 4 weeks to 12 months. Generally
the longer the deferral period the lower
the premiums to the policy will be. |
|
You
should ensure the length of deferral period
established within your plan is appropriate
to your circumstances. Many employed people
can afford to set longer deferral periods,
as their employers choose to pay them their
normal income during the early months of
a long term illness. The Self-employed should
think carefully about the appropriate period
of time of the deferral period. |
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| Employee
Options |
If
you are employed, it would be wise to check
the level and structure of any sickness
pay arrangements offered by your employer.
Often employers elect to pay your usual
salary for a given time before decreasing
or, perhaps, stopping it altogether. The
information available from your employer
will make it possible to work out the deferral
period most appropriate to your circumstances.
Ideally you would claim benefits from the
policy at the end of the period where your
employer provides income. This would ensure
you always have sufficient income, from
either your employer or the policy, to
provide for your needs.
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| Check
the wording of all policies, especially the
insurer's definition of disability. You would
also be wise to consider any restrictions
that are placed upon the type of work you
might be allowed to do, were you unable to
continue your normal employment. |
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| Certain
occupations are statistically more likely
to cause illness or accidents, this means
the risk of a policyholder making a claim
is greater for the insurer. This extra risk
has two ways of showing itself, either through
higher premiums for such occupations or in
a greater number of restrictions under the
policy. |
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| For
further help and free advice please email
us. |
| |
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