Critical illness is up there with one of the most important issues in life that people just don’t like or want to talk about. Now, at the risk of sounding depressing, have you ever thought about how you were to financially cope if you fell too ill to work? Could your family cope? Perhaps this New Year should encourage you to kick start some financial planning and preparation for just such a scenario why not get some professional life insurance advice and even a life insurance quote or two. Don’t take a macabre view on the process, see it as an investment, should (being the imperative word here) anything happen to you.
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?
It would be nice to think critical illness is a little like Ronseal Quick Drying Woodstain, and does exactly what it says on the tin. Sadly, as is commonly the case in the vast world of financial services, it isn’t so simple. While you’ll be protected against the effects of some life-altering diagnoses, no policy covers all known conditions you may encounter.
By now you’re probably starting to understand why this is a complex consideration for anyone after health insurance. It’s hard to imagine why someone would want to protect themselves, and their loved ones in the event of death, if they still run the risk of losing an income, and putting those dependents in an equally catastrophic scenario, if they ever fall ill. Lecture over: here are some key things to bear in mind.
Just 25 per cent of the British public who have life insurance, according to prudential, buy on price alone. But even if the person applying for a policy is astute, according to fellow insurer Scottish Provident, the UK as a whole, isn’t. A recent study by the provider found that six Britons in ten have no protection, with just 35 per cent taking out life cover, and only 13 per cent opting for a policy that pays in the event of a critical illness. These are uncomfortable statistics to read when you consider how much debt must therefore exist without any protection.
This difference between the numbers of people with standard life insurance, compared to those with critical illness shows many customers may not have a truly comprehensive understanding of the marketplace. Understandable, really, as in 2006 the FSA reviewed the life insurance market. It found that firms needed to make significant progress when it came to transparency, and the clarity of information provided to potential and current customers alike.
In the simplest terms, critical illness cover protects an individual if they suddenly contract a critical illness. The UK’s biggest killers, heart disease and cancers are automatically covered in health insurance policies. Similarly, strokes, cancers, Parkinson’s disease, kidney failure and Alzheimer’s disease are all generally covered. However, most policies specify that the individual must survive a certain length of time following their diagnosis, usually between 1 to 2 weeks, in order to receive the payout. Therefore, it is important to thoroughly understand the policy you are considering.
The problems begin when you consider other so-called critical illnesses. For example, diabetes for many suffers is by no means regarded as critical. This is because most individuals can live fairly normally with the disease for years after their first diagnosis. However, diabetes is in actual fact the 5th most common cause of death. This is largely due to the fact that the disease can lead to various other health complications, including nerve damage and issues with the body’s extremities. So say a diabetes sufferer was to lose their hands and feet, they would not be covered by their critical illness cover. But say a healthy individual was to lose their hands and feet in an accident for example, they would be covered by their critical illness cover. This highlights just how important it is for you to seek financial advice in order to create a plan that is personalized to your circumstance.
Of course there are various help points for diabetics, for example Diabetic Life who operate on the market for exactly this reason. But the point still remains. So you must decipher if obtaining critical illness cover will be of true benefit for you. When you weigh up the potential benefits of an all inclusive life insurance and illness package, I personally believe the pros would certainly outweigh the cons.
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.
Debi writes for Just Life Insurance the UK’s No1 site for life insurance advice, and market leading life insurance quotes.