What are the premium options when taking out a Critical Illness Policy?
There are three options you can choose from when deciding upon taking out a critical illness policy.
Firstly you could choose to take out the policy with a guaranteed premium. This would mean that your premium would stay the same throughout the term of the policy. You could always choose to increase your sum assured at any point throughout the policy if you wish, therefore this would then increase your premium or perhaps decrease your premium if you wanted to decrease the sum assured.
Another option is to choose a reviewable premium where the premium may change at certain points throughout the term of the policy. For example the monthly premium may increase, decrease or the stay the same normally on a five yearly review by the provider. The reason for this is that when you get an offer from the provider you choose for example you could choose from providers such as AXA, BUPA, Scottish Provident, Legal and General, Scottish Equitable, Friends Provident, Liverpool Victoria or Norwich Union they will make assumptions based on the future. Such assumptions could be claim costs or investment returns and if these were to decrease from their expectations then the premium may reduce slightly on the other hand if such factors were to be higher than expectations then premiums may increase slightly.
Finally the last option is renewable premiums where by the premiums could increase or decrease on each renewal throughout the term of the policy. This can change with no need to gather any further medical information based on your age and also the rate of the premiums at that moment in time. It is normally apparent that your premiums would increase at each renewal because you would be older than when you first applied. The provider will tell you typically 60 days before the premiums are due to change.