Some Explanations Concerning Critical Illness Insurance

Should you fall prey to a critical illness in the future, the impact on your dependents and yourself could be considerable. For example, if you had stroke, heart attack or cancer you may consider taking out a critical illness cover. When you fall critically ill, financial implications may arise as your income could be lost. Especially if you are the sole working person at home, then the last thing you may want to happen is losing your home as you cannot pay your mortgage. Critical illness cover may be useful as it can give you the peace of mind in such circumstances.

Critical illness insurance may award you a tax free lump sum if you are diagnosed with a critical illness met by your company’s policy definitions. There are many types of insurance policies that exist. However, you should not confuse critical illness cover with private medical insurance which pays out only your medical charges if you fall severely ill. You should not also make the mistake of confusing critical illness with income protection insurance. Income protection insurance is designed to pay you out for a specified lapse of time if you encounter an accident or fall ill and are consequently unable to attend work. The payment may cease if you are fit to resume work.

According to the Association of British Insurers (ABI), different policies may cover different critical illnesses. Each policy leaflet may explain clearly what conditions are covered under the specific critical illness policy. Therefore, companies may make the payout only according to what meets the policy definitions and no other. Furthermore, the ABI has published model definitions for critical illnesses covered. As a matter of fact, critical illness insurance companies may use this to review claims. You should bear in mind that each critical illness shown on your policy leaflet may only reflect what cases are covered. For example, some types of cancer might not be covered. You should see the full explanations under every critical illness covered. If you are still unsure, you could seek some advice from your company.

Most insurance companies cover seven core critical illnesses. These can be classified as follows: cancer, heart attack, stroke, kidney failure, major organ transplant, multiple sclerosis and coronary artery bypass surgery. These critical illnesses are most likely to happen that is why most companies include them in their critical illness policies. A model of additional diseases was set by the ABI. These can be classified as follows: aorta graft surgery, benign brain tumour, coma, blindness, deafness, loss of speech, loss of limbs, heart valve replacement or repair, motor neurone disease, paralysis/paraplegia, Parkinson's disease, terminal illness, third degree burns. Not every critical illness insurance companies might cover all these diseases but might cover some of them as a means to provide more cover. Some companies might also cover a critical illness like total and permanent disability, not mentioned here but with the same rule set by the ABI.

Many people may take critical illness insurance for the sake of protecting their family. However, to be able to book a good deal, you should shop for as many quotes as you can. You may then have a clear idea about how each company defines its critical illness policy.