Should Critical Illness Cover Be A Critical Part Of Your Financial Planning?
by Debi McGrady
Critical illness is one of those topics that people like to avoid until it is forced upon them. We are happy to watch intense stories of illness on the soaps, but how often do we really think about how critical illness could affect our lives? You have to be prepared for such scenarios, as humans we are in no way invincible. So when it comes to critical illness cover, you can never do enough planning - no matter what you think, burying your head in the sand is never the answer! If you've recently been shopping around for life insurance quotes, and received some good life insurance advice, then you're probably in the minority, for the rest of us its best to read on.
Do you have a life insurance policy? Do you know that it is unlikely to pay out should you become too ill to work? It is advisable to research your current deal to establish if it includes critical illness cover. If it doesn't, most policies do offer it as an addition to your outstanding policy. The long term benefits of paying that little bit extra per month can make things a lot easier for your dependents. Statistics by BUPA, one of the UK's most established private health care companies, highlighted that one in four people develop a serious health problem between the age of 30 and 60. This is a surprisingly high number of individuals, and perhaps something to spur you on to adapting your policy?
Unfortunately, there are so many possible conditions that can stop you from working and sadly not all illnesses will be covered in your policy. It is impossible for the financial services to cover all possibilities, as with most products they offer. Therefore, it is imperative to seek financial advice over which policy would be best for you. Do a bit of research into your family's medical history; this will give you a better outline to any possible conditions you could incur in the future.
So how many of you have now started to fall asleep? Ok, obtaining health insurance is a bit of a complex and time consuming task, but as with all investments, it pays to look at the potential long term benefits. Don't risk your family's future financial security just because you didn't read the small print on your life insurance policy. Although, I'm not writing to lecture, here are some useful tips if you are considering taking out critical illness cover...
So, here are some hard statistics to get you going. According to Insurance Provider Scottish Provident, a huge 6 out of 10 people in the UK have no protection whatsoever, 35% have life cover alone and just 13% choose a policy that protects in the event of critical illness. Which band do you fall in? These statistics are shocking, especially when you consider how much debt must be incurred from those without any protection at all.
However, it is not down to pure ignorance of the population that these statistics are so low. Often, a majority want to look into such policies, but who don't fully understand what's on offer and don't know where to get impartial advice. In fact, back in 2006, the Financial Services Authority warned that clearer and more readily available information is needed for the consumer. Today, the internet provides a huge amount of information if you feel that you need further clarity on the issue of critical illness cover.
So, the basics are that Critical Illness is insurance for ill health, which usually entitles the holder to a lump-sum payment should they be diagnosed with a serious condition. A caveat is regularly put on this, specifying the individual must survive for a period of time following diagnosis, in order for payment to be issued. This is often 14 days. Heart disease, strokes, cancers, Parkinson's, Alzheimer's and kidney failure are commonly covered. One in three Britons are likely to develop cancer in their lifetime. And then heart disease remains one of the UK's biggest killers. Looking at it from this view, it seems as if the average policy will safeguard people pretty well against the big nasties.
However, there are some other illnesses that are not covered in such policies. Take Diabetes for example. Most individuals with diabetes can continue to live a fairly normal life for years following diagnosis, and so lenders do not include the illness as part of their policy. Yet diabetes is linked to various other illnesses which, as a result, are not insurable either. An example of which is nerve damage. Nerve damage as a result of diabetes can result in the loss of extremities, such as hands or feet, but cannot be insured. However, if a person was to lose their hands or feet by any other means that would be completely insurable. This is a shocking piece of information, especially as diabetes is the 5th most common cause of death in the UK.
As ridiculous as this sounds, it is in fact true, and although there is a huge financial support base out there for diabetics, there are numerous other illnesses where the same applies. You need to work out if critical illness cover would be of any practical use for you. If you live a relatively normal life and suffer from no long term or genetic illnesses, then it would be a sensible option to look into critical illness cover. After all, financial cover could be vital for your family if you suffer from a sudden illness. Plus, if you are going to take out a life insurance policy, wouldn't it make sense to ensure it covers all the more common critically illnesses too? The key is to prepare for any eventuality.
So how critical is critical illness? Well it is, as with most things, a personal matter, there is by no means a definitive answer. It is probably worth looking in to mind you. Gain some financial advice, do a bit of your own research in terms of your current financial situation, your current health and your family's medical history and you never know, obtaining critical illness cover could well be the best decision you have ever made.
Do you have a life insurance policy? Do you know that it is unlikely to pay out should you become too ill to work? It is advisable to research your current deal to establish if it includes critical illness cover. If it doesn't, most policies do offer it as an addition to your outstanding policy. The long term benefits of paying that little bit extra per month can make things a lot easier for your dependents. Statistics by BUPA, one of the UK's most established private health care companies, highlighted that one in four people develop a serious health problem between the age of 30 and 60. This is a surprisingly high number of individuals, and perhaps something to spur you on to adapting your policy?
Unfortunately, there are so many possible conditions that can stop you from working and sadly not all illnesses will be covered in your policy. It is impossible for the financial services to cover all possibilities, as with most products they offer. Therefore, it is imperative to seek financial advice over which policy would be best for you. Do a bit of research into your family's medical history; this will give you a better outline to any possible conditions you could incur in the future.
So how many of you have now started to fall asleep? Ok, obtaining health insurance is a bit of a complex and time consuming task, but as with all investments, it pays to look at the potential long term benefits. Don't risk your family's future financial security just because you didn't read the small print on your life insurance policy. Although, I'm not writing to lecture, here are some useful tips if you are considering taking out critical illness cover...
So, here are some hard statistics to get you going. According to Insurance Provider Scottish Provident, a huge 6 out of 10 people in the UK have no protection whatsoever, 35% have life cover alone and just 13% choose a policy that protects in the event of critical illness. Which band do you fall in? These statistics are shocking, especially when you consider how much debt must be incurred from those without any protection at all.
However, it is not down to pure ignorance of the population that these statistics are so low. Often, a majority want to look into such policies, but who don't fully understand what's on offer and don't know where to get impartial advice. In fact, back in 2006, the Financial Services Authority warned that clearer and more readily available information is needed for the consumer. Today, the internet provides a huge amount of information if you feel that you need further clarity on the issue of critical illness cover.
So, the basics are that Critical Illness is insurance for ill health, which usually entitles the holder to a lump-sum payment should they be diagnosed with a serious condition. A caveat is regularly put on this, specifying the individual must survive for a period of time following diagnosis, in order for payment to be issued. This is often 14 days. Heart disease, strokes, cancers, Parkinson's, Alzheimer's and kidney failure are commonly covered. One in three Britons are likely to develop cancer in their lifetime. And then heart disease remains one of the UK's biggest killers. Looking at it from this view, it seems as if the average policy will safeguard people pretty well against the big nasties.
However, there are some other illnesses that are not covered in such policies. Take Diabetes for example. Most individuals with diabetes can continue to live a fairly normal life for years following diagnosis, and so lenders do not include the illness as part of their policy. Yet diabetes is linked to various other illnesses which, as a result, are not insurable either. An example of which is nerve damage. Nerve damage as a result of diabetes can result in the loss of extremities, such as hands or feet, but cannot be insured. However, if a person was to lose their hands or feet by any other means that would be completely insurable. This is a shocking piece of information, especially as diabetes is the 5th most common cause of death in the UK.
As ridiculous as this sounds, it is in fact true, and although there is a huge financial support base out there for diabetics, there are numerous other illnesses where the same applies. You need to work out if critical illness cover would be of any practical use for you. If you live a relatively normal life and suffer from no long term or genetic illnesses, then it would be a sensible option to look into critical illness cover. After all, financial cover could be vital for your family if you suffer from a sudden illness. Plus, if you are going to take out a life insurance policy, wouldn't it make sense to ensure it covers all the more common critically illnesses too? The key is to prepare for any eventuality.
So how critical is critical illness? Well it is, as with most things, a personal matter, there is by no means a definitive answer. It is probably worth looking in to mind you. Gain some financial advice, do a bit of your own research in terms of your current financial situation, your current health and your family's medical history and you never know, obtaining critical illness cover could well be the best decision you have ever made.
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