Critical Illness Cover - Critical Illness

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.

As with any policy, there are options with Critical Illness Insurance. They come in three basic forms.

The first type you will encounter is the Level Term Cover. When you plan to take critical care cover, you will need to determine how much you plan to be covered for. This forms the basis of how much of a premium amount you pay every month. Once you have decided on the sum assured in the event of a major illness, you can choose to receive the amount on a level term basis. This means that the amount you get into your account remains the same for the duration of the policy. The term can be anywhere for four years to 40. You can definitely invest in a new policy once it expires.

Another option you can look at is the mortgage protection term cover. In this case, once you decide on the policy, your sum assured can be given to you in a decreasing manner in relation to your mortgage payable. This takes care of two issues at one go.

You can also take up the policy on a renewable basis. This means that the policy will be up for review at the end of a specified period. Depending on certain criteria, the premium can be kept steady or can be increased. This will be based on age, progression of illnesses etc.

An additional aspect to each of these options is that you can have your premiums guaranteed. This is in cases where the premium payable at the beginning of the policy remains constant for the duration of the policy or up to the stage of review.