Critical Illness Insurance Pros And Cons
On diagnosis of a life threatening illness, critical illness insurance will pay out
a tax free lump sum which can give the policy holder a welcome financial boost. This type of insurance can be taken out separately or alongside a traditional life insurance policy. However taking out critical illness insurance has both advantages and disadvantages.Advantages
A tax free lump sum - is paid out within 30 days of diagnosis of a life-threatening illness meeting the specified criteria. This can be used in whatever way you see fit and often the policy holder will take out critical illness insurance to cover mortgage payments.
Up to 30 diseases covered generally all critical illness insurance policies will cover 7 core conditions including cancer, strokes, heart attacks, major organ transplants, kidney failure, multiple sclerosis and coronary artery bypass. Any additional illnesses covered will be detailed in the key features document provided by the insurer.
Protection for dependants - Critical illness insurance is considered almost essential for those who have dependants. Most insurance providers understand the need to protect your family and many now offer automatic critical illness cover for children.
Guaranteed premiums Whilst reviewable premiums tend to be cheaper in the offset guaranteed premiums means the amount you pay never chances. This can prove advantageous for those who develop medical conditions later on in life.
Peace of mind Critical illness cover can provide those with a young family or dependants with the peace of mind that in the eventuality that they can no longer work, they will be covered. This allows for stress free recovery time and make sure that the dependants lifestyle will not have to suffer.
Disadvantages
Extra costs Generally the more illnesses covered the higher the premiums. However by selecting to use an insurance broker customers can compare a range of quotes from separate companies to try and find the best deal
Limitations of disease cover - Since the introduction of new regulations in May 2003 certain diseases such as lymphoma are no longer covered by critical illness insurance, however companies like Prudential now offer more comprehensive life insurance policies.
Existing medical conditions Should close family members have any pre-existing medical conditions, this may affect the premiums of your life insurance, Additionally if the customer themselves has any medical conditions this will also have an effect.
Although there are disadvantages to taking out a Critical illness insurance policy the pros far outweigh the cons and for those who have a young family this type of cover is particularly vital. Critical illness cover can therefore give the policy holder the peace of mind that they will be covered and be able to provide for there family in every eventuality.
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