Critical insurance provides a form of financial protection for yourself and/or your family in the event that you should suffer a serious illness. The critical illness insurance policy is designed to payout a tax-free lump sum on the diagnosis of one of the conditions specified on the policy. This provides you and any family/dependents the peace of mind and security that you can financially manage whilst you are going through any treatment etc. If you were unfortunate enough to have to put in a claim on your critical insurance cover plan then you will be required to meet the definitions for that particular condition. Should you not meet all the criteria the insurance company will not pay out the sum assured. However, as long as you maintain the monthly premiums, you will still remain on cover for the term of your critical insurance plan.
Critical Insurance - Critical Insurance Cover - Critical Cover
Another reason that an insurance company may not pay out on a critical insurance is due to nondisclosure. At the point of applying for any critical illness insurance you are required to provide relevant details regarding yourself, lifestyle, occupation, health, family health etc. Any information that is not disclosed at this point in time could result in a claim not being valid.
For example, if you had had high blood pressure but you were/are on medication that was maintaining your blood pressure at normal levels this information needs to be provided to the insurance company. You may not initially consider that this needs to be disclosed as essentially your blood pressure is at normal levels. However, should you then suffer a heart attack and put in a claim you will probably fit all the definitions but the claim will be invalid due to nondisclosure. Also, this will normally cause your critical cover plan to be void. This is due to the fact that the insurance company would have taken the high blood pressure into account and assessed the potential risk and offered the critical illness insurance cover accordingly i.e. possibly with increased premiums.
Conversely, if you were to suffer a heart attack but not disclosed the fact that you had attended hospital with a fungal infection in your toes. This would generally not cause in an issue as it would probably be considered a minor detail with no relevance to the heart attack. Therefore, though essentially there was nondisclosure of information it would be unrelated to the heart attack and the claim would normally be valid.
The important point to remember when applying for any critical insurance cover is to provide all information truthfully however irrelevant you may consider it to be. Many companies specialise in a number of critical illness insurance such as over 50’s critical illness insurance and term critical insurance so it’s important to look at all the available options.