Critical Illness Insurance And Life
Critical illness insurance and life insurance is designed to pay out a tax-free lump sum if you were to suffer from one of a range of specified health problems. Critical illness and life is sold by a range of insurance companies who will normally sell other types of insurance covers; life insurance is one such cover that is commonly sold by these companies. Life insurance is closely related to critical illness cover, though not the same. Life insurance will pay out a tax-free lump sum should you die whereas with critical illness cover you do not have to die to receive the benefit. Additionally, the two plans can be bundled together and is known in the industry as critical illness with life insurance. Everyone’s circumstances are different and what may be the right cover for one person is not necessarily right for another. One way of looking at it is to consider how you and/or family would manage financially should you suffer a serious illness or die. If you do not have any substantial savings then some form of insurance put in place maybe advisable to cover the unexpected happening.
There are a wide range of critical illness cover and life policies available and it is important to be aware of the differences so that you know what you will actually be covered for. All critical illness plans will cover the main core illnesses such as; heart attack, stroke, cancer, coronary artery bypass etc. However, further conditions will be covered and the number and type will vary from provider to provider. In addition to this, insurers may specify a waiting/survival period during which a valid claim will not be payable; this maybe anything up to 30 days. Therefore, taking this in to consideration, combining the critical illness cover with life insurance may be advisable; as if you were not to survive the waiting period a critical illness and life insurance will pay out on the life insurance component of the plan.
Therefore, what type of cover you put in place is down to personal choice and age as many are available for a specific age, for example over 60’s critical illness insurance. The different covers will all pay out a tax-free lump sum. However, life insurance will only pay out upon your death whereas critical illness will pay out upon diagnosis of one of the conditions specified in the policy details. Critical illness with life insurance will in effect cover both eventualities; however the majority of critical illness with life insurance plans will only pay out once i.e. if it was to pay out on a critical illness your life cover will also cease.