What is Critical Illness Insurance?

Critical illness cover pays out a tax-free lump sum after diagnosis of a condition specified in the policy. The policy ends once the payment is made.

These days we are very fortunate to be living longer than those in previous generations but that does mean we are more likely to suffer some form of illness in our lifetime. This is one of the reasons why planning ahead to look after your loved ones should your health decline is important.

Our life insurance experts will be pleased to provide you with fee-free no obligation advice on how critical illness insurance can help keep your family protected. They will also take into consideration any existing cover you have in place so that you set up all the cover you need and at the right level for your circumstances.

What are the benefits of Critical Illness cover?

If you are diagnosed with a serious medical condition the chances are that you will no longer be able to work or that your working life will be severely impacted. You may be entitled to some sick pay but this may be a short term solution and may not be sufficient for your current lifestyle.

If you are self-employed and unable to work, you could see your income disappear altogether and not be entitled to any Statutory Sick Pay at all.

With a tax-free lump sum pay out from a critical illness insurance policy you can:

• Pay off your mortgage

• Pay for private medical bills

• Cover household expenses

• Clear a loan or debts

How much will Critical Illness insurance cost?

Critical Illness cover can often be bought together with life insurance and this is often a cheaper option. This is because the policy will pay out only once - either on diagnosis of a condition or in the event of death. When you combine both life insurance and critical illness, cover for terminal conditions is often also included.

For any type of life insurance cover there are some common factors that are likely to reduce the premiums of your insurance and these are:

• The length of the policy

• The amount you want to cover

• Your age

• Your medical history

• Your lifestyle/smoking habits

• Occupation

Why should you get advice from an expert in Critical Illness Insurance?

When you are considering Critical Illness cover then the cheapest is not always the 'best' as your needs are individual to you and there is little point in taking out a low cost Critical Illness policy only to discover it won't help you when you need it.

With Critical Illness policies you can choose how many conditions you wish to cover and that can impact the cost of your cover. You could add permanent disability for example. The greater the range of medical needs that are included, the higher your premiums will be.

Children can often be added to the policy at very little or no extra cost. If a child was diagnosed with a serious condition then it can mean one or more parents or guardians having to give up work to care for them. In these circumstances having a pay out which can cover your bills whilst you care for your young one can be vital.

As many conditions are less common in younger people, and because premiums will be spread over a longer period, generally the earlier in life you take out Critical Illness Insurance the lower the cost will be. Some people choose to end their policy when their mortgage is paid off or when their children become independent but this is not the case for everyone.

With so many considerations when it comes to setting up Critical Illness cover it is well worth talking it through with those in the know and that's where are expert life insurance team can help. We have partnered with them as they have huge amounts of experience helping people just like you find the cover they need.

What is the difference between Income Protection and Critical Illness Cover?

Income Protection is just as it says. It provides an income when you are unable to work due to illness or injury. This income will be an amount stipulated in your policy and is normally a percentage of your current pay. It is used to span a gap and see you through until you are well enough to work again. With income protection you can set a deferment period so that payments do not start until after a set time - for example after Statutory Sick Pay has ended.

Critical Illness Insurance is one single payment which is not subject to tax. The cover only pays out for any specified condition on your policy. This type of insurance is there to relieve money worries at a time when you need to focus on recovery and also can help with medical expenses if you do not have private medical cover and need to have treatment outside the NHS. There is no deferment option with Critical Illness cover. Unlike Income Protection, pre-existing conditions are normally not covered.

How can I find out more about Critical Illness insurance?

Request a callback simply by using our button above or click on the link below. All help and advice is totally fee-free and the specialist team of critical illness insurance advisors we use are fully FCA authorised, both for your reassurance and protection.

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Our life assurance partner is LifeSearch who are one of the UK's largest life assurance brokers. They have been helping customers with their expert knowledge for over 25 years now. They can provide cover from a selection of well known companies including Aviva, AIG, British Friendly, Legal & General, LV=, Royal London,The Exeter, Guardian, Vitality, Cirencester, Scottish Widows,National Friendly, Holloway, Shepherds Friendly and Zurich. They are, like MoneyMaxim, regulated and authorised by the FCA, and come with a guarantee to give you the most competitive premium possible to fit your requirements without fees and with no obligation.

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This content was last reviewed on 05/07/2023