What cover options are available when taking out Critical Illness Insurance?
There are three main options when taking out Critical Illness Insurance.
Firstly there is Level Term Cover. When deciding upon taking out a Critical Illness policy you will need to decide on how much you wish to be covered, normally this is subject to how much you want to pay on a monthly basis. Once you have decided on the sum assured and if you were to choose the cover on a level term basis this would mean that the cover amount you chose would stay the same throughout the term of the policy. This can be anything from five to forty years which again you would choose at the start of the application.
Another option is the mortgage protection term cover where the sum assured you choose at the on set of the policy would then decrease in line with your repayment mortgage for example. This therefore means that for example the sum assured you choose would decrease for example a yearly basis to keep in line with your mortgage amount.
There is also the option to take out the policy on a renewable basis which would then be subject to a review every five to ten years. At the point of renewal the premium you pay on a monthly basis may then increase, decrease or stay the same.
With any of these options you can choose if you want your premiums to be either guaranteed where the premium you pay at the start of the policy stays the same throughout the policy or reviewable. This is where premiums may increase, decrease or stay the same due to assumptions that have been made by the provider on the future for example on investment rates, interest rates, claim costs, expenses etc. Therefore if their prediction were accurate the premium would then stay the same, however if they were to have under estimated then the premiums may increase slightly.