Personal protection plans such as over 60’s critical illness cover and over 50’s critical illness insurance are widely available from a number of different insurers. Both are designed to pay the beneficiary a tax-free lump sum; with critical illness cover the benefit is payable upon diagnosis of one of the conditions specified within the policy details and is normally paid to the person insured. Whereas, life insurance is payable upon death of the person insured thus the benefit is paid to the beneficiary this could be your partner/spouse, children or any nominated person. Both plans can be purchased separately or together which is known as critical illness insurance and life insurance.
Over 60’s critical illness - Over 60’s critical illness insurance - Over 60’s critical illness cover
Over 60’s critical illness insurance, originally known as the ‘dread disease insurance’, is not generally cheap to buy. However, should you suffer a serious illness during the time you are covered by the plan it would provide invaluable financial assistance during quite a stressful and emotional period. The benefit amount and length of time you have the critical illness cover for is entirely your choice. Obviously, everyone’s circumstances are different; some of us will have dependents to consider whilst others may only have themselves to support during any period of time that they may suffer a serious illness. Additionally, we all have our own budget and it is important that the cost of the critical illness cover fits within this otherwise if you cannot keep up with the monthly premiums you will be taken off cover. Therefore, it is possibly better to have a little cover at an affordable price than no cover at all.
Life insurance is relatively cheap to buy, especially compared to critical illness cover. This is because critical illness insurance is considered by insurance companies to be providing cover for a greater risk; as generally you are more likely to experience a critical illness before retirement age than you are to die. Therefore, insurers have to cover the greater probability of having to pay a claim on an insurance policy such as critical illness. Once again, as with over 60’s critical illness cover, the benefit amount and term of cover is entirely up to you, along with whom the money goes to should you die.
Critical illness with life insurance is combining the two policies together and is normally around the same price as critical illness alone. It basically works the same as if the plans were separate; it will pay out upon diagnosis of any one of the specified illnesses or upon death of the person insured. However, should you suffer a critical illness and make a successful claim on the over 60’s critical illness with life insurance plan then the cover will cease to exist. Therefore, you will no longer have any life insurance cover in place.