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This website contains information which may or may not be applicableto your own situation and circumstances.

Any information or advice on this site does not constitute a personal recommendation. If you have any doubts as to whether a product or service is suitable for you, please seek independent advice.

CRITICAL ILLNESS COVER

This provides a lump sum on the initial diagnosis of a serious medical problem.

It is available on a specified term and a whole of life basis.

Critical Illness can be set up as a stand alone policy or can be incorporated with your life cover policy for an extra charge.

Typically, the majority of claims arise from a few illnesses like cancer, heart attacks and strokes.

Ideal way of paying off a mortgage or loans in the event of serious illness, meaning there is one less thing to worry about.

Policies do vary but all will typically pay if you suffer a heart attack, cancer, a stroke or kidney failure or need a coronary bypass or transplant.

There are generally three ways of covering yourself in the event of critical illness:

• Combined with a straight life assurance policy (cheapest option normally)
• As a stand alone policy for a set term of years
• As a stand alone policy for the whole of your life (most expensive option)

If you combine a policy so it contains both life cover and/ or critical illness cover then you need to ensure that you write the policy with the appropriate definition.

Types of cover

Guaranteed cover: under this plan the rate at which premiums are payable is guaranteed by the insurance company for as long as you maintain contributions. In the long term this can be an extremely valuable feature.

Reviewable cover: under this plan premiums are kept to a minimum as you, rather than the insurance company, are shouldering the risk of changes in morbidity experience. The insurer has the right to review premiums based on claims history, which could mean premiums increase significantly at a review. Reviews are normally carried out every five years but may vary from one insurer to another.

WHAT ARE THE CHANCES OF BEING DIAGNOSED WITH A CRITICAL ILLNESS?

Probably higher than we would like to think.....

FACTOIDs: Each year almost 220,000 people are diagnosed as new cancer registrations, which would qualify as a claim under the Association of British Insurers standard illness definitions applying to Critical Illness policies.*

Up to age 65, a man has a 1 in 5 chance and a woman has a 1 in 6 chance of suffering a critical illness.*

700,000 people this year will develop cancer, heart disease or suffer a stroke.*

1 in 4 of the population will suffer a critical illness before the age 65.*

We are 5 times more likely to suffer from a serious illness than die before reaching age 65.**

Sources: *ERC Frankona 2000/**Swiss RE 2000

Thanks to the skill of doctors and continuous advances in medical research and technology, many people now survive heart attacks, strokes and even cancer. The good news is that people are more likely to survive such serious illness and live for a considerable time than ever before. The not such good news is inevitably concerned with the financial aspects of being in this position. If you have life cover to protect your loved ones it won't benefit you as any money will only be paid on death.

Most people who are diagnosed with a serious illness will need to re-assess many aspects of their lives. They may not be able to work for a period of time and feel that, assuming they return to work, they would like to return to a less stressful environment. It is highly likely that income will suffer in the short term, and returning to any kind of work may not be possible. It may be that modifications need to be made to your home because of the nature of your illness, or a partner may need to give up their job in order to look after you.

Whatever the nature and implications of your illness, what would really make a difference is a policy which helped you at the time when you most need it.