Critical Illness Reviews

The most common answer to this is the guaranteed immediate annuity, which is payable for a fixed number of years and thereafter until critical illness. The payments continue for the specified period whether the annuitant lives or not, and if he dies the money will be payable to whoever he has named in his will. The amount of the annual payment per £1,000 of purchase money is of course lower than for a non-guaranteed annuity.

Under a capital-protected immediate annuity, there is a guarantee that the total gross installments payable will not be less than the purchase price of the annuity. In the event of critical illness before the full amount has been received, the balance is generally payable as a lump sum.

Very often, of course, it is a married couple who are seeking to augment their retirement income. In this case the most suitable alternative is usually the immediate joint critical illness insurance. Here, payments continue until the second partner has contracted a critical illness, and the rate of payment will depend on the partners’ ages (more rarely used is the joint life cover, where payments cease on the first claim). Such critical illness insurance annuities are, of course, even more vulnerable to inflation and the survivor may be left with a quite inadequate income. So care is necessary in making such an arrangement.

The problem of inflation can be partly surmounted, but only at the expense of the original income. Some offices offer increasing annuities, where the annual payment increases by a fixed percentage or amount each year. Provided the annuitant is prepared to sacrifice part of the original income and expects a long life, this may be a worthwhile alternative to the ordinary annuity method.

Because a considerable period has to elapse before escalating annuity installments will match those which would have been available under a level annuity, it is often preferable to buy the smallest acceptable level annuity and to retain capital which can be used to buy further policies later, when the purchaser is older.

Other innovations of more use to the critical illness insurance policyholder concern the alteration in the terms of the policy to take account of moving house. It is obviously desirable to have the option to increase the sum assured without medical evidence so that an additional critical illness insurance policy can be added when a larger house (and loan) are acquired. One alternative is the option to extend the term of the original critical illness insurance policy so that its increase in value can repay a larger loan. (Such an extension, incidentally, is contrary to an old tenet of actuaries that contracts may be shortened but never lengthened because of the extra risk to the company involved in lengthening a contract. You can always convert a critical illness insurance policy, thus shortening the term, but you cannot normally do the reverse.)

While flexibility is useful, the company’s bonus record is probably of greater importance. Any contract you choose is guaranteed to repay the loan on the occurrence of a life threatening illness and conservative bonus assumptions mean it is as good as guaranteed to do so at maturity. But the surplus that emerges over and above this will depend on the company’s investment success over the period. It does not make a great deal of sense to select a critical illness insurance policy simply because its monthly premium is 50p below that of its competitors. One of the reasons for buying a critical illness insurance policy is its investment merit, and so the selection of a company with a good investment record should take priority over small cost differentials.  

It is also worth noting that any existing critical illness insurance policies you already have may be tailored to repayment of a loan. Many companies will allow you to “trade-in” your old policy against a new one of the right type for the repayment of the loan you want, and the surrender value of the old one. Thus, the purchase of critical illness insurance can be more than just the protection of your health.

There is another category of critical illness insurance policies especially designed for children. These are deferred assurances and are known by names such as junior critical illness insurance policies or juvenile critical illness insurance. The parent takes out a critical illness insurance plan on his or her own life to mature when the child is 18 or some other specified age. At this age the parent then has the option of taking the cash sum provided by the policy (on the child’s behalf), or the child may continue to pay premiums at the same or a higher rate for a with-profit critical illness insurance policy.

If the parent dies or contracts a life threatening illness before the option age is reached, premiums may cease until the child reaches the appropriate age when the options are still available. An income benefit may as well be paid during this period. Since the critical illness insurance policy is, at the outset, on the parent’s own life, tax relief is available on the premiums, and when the child takes over the policy it, too, will obtain tax relief within the usual limits.

If the child opts to continue the critical illness insurance policy, premiums continue at the same or higher rate regardless of what type of policy is chosen, but the sum assured will vary according to the type of policy and its term. What is happening is that the accumulated sum is being used to augment the benefits on whatever type of critical illness insurance policy is chosen, so that the total sum assured provided for the annual premium will be far higher than that under the company’s normal scales. Normally, the premium rates (and hence the benefits) at the option date are guaranteed when the policy is first purchased.

Critical illness insurance for children can let parents have a sigh of relief. They will have the peace of mind that everything will be fine should their children happen to fall critically ill. So, choose the appropriate insurance which will give you such benefits.

Nobody wants to be ill. Our health is indeed extremely precious to everyone of us. Without it, there is not much we can do, let alone enjoy in life. In fact a lot of resources is spent both by authorities, private companies and individuals on health issues alone. The health budget of any government generally has the lion’s share of a country’s spending. All this says that our health is vitally important. Obviously, should we fall ill with a critical illness our entire life and the lives of our close ones is affected, sometimes in a big way. One of the first casualties of a critical illness is our inability to work and earn a living. While some of us do have a critical illness cover that pays us money when we are ill, we should carefully access whether we have the right kind of cover.

There are cases where we will have to take out a critical illness insurance policy whether we like it or not. Take for example securing a mortgage. In order to protect the loan, some banks and building societies will probably ask for some form of critical illness cover. In case you are ill, the cover will pay a sum of money each month or as a lump sum to cover the loan or mortgage. In this case, getting the right critical illness cover will mean getting one that will at least meet the cost of the loan.

 But just paying off debts or servicing these is not enough. The right insurance broker will advise you on how much cover you may need based on your requirement in terms of monthly income lost should you fall ill. A quick calculation will give you an idea of what your outgoings are. Make sure the pay outs of the policy cover at least these monthly expenses. If you have kids studying you may need to budget in advance and consider inflation and increases in fees so that you get the right cover.

Considering how much cover you need and getting the amount right is a good way to start.

Critical illness insurance has the ability to award you a tax free lump sum upon the claim of an illness which is defined by your policy. You should know that a critical illness insurance policy from one company can differ to that from another one. In other words, you can find definitions for the same illness which are not the same in policies which come from various companies. It is therefore vital to be knowledgeable on the subject before deciding to sign the agreement with an insurance company. Scanning the market thoroughly for quotes can be a wise idea.

This will give you an idea on the different tags of different critical illness insurance plans. It is essential to find the most suitable critical illness insurance policy for you. A simple search on Google can lead you to thousands of online insurance companies. If you take your time, you will most probably end up having the right critical illness insurance scheme. Take care to read your policy documents well as you will need to know about the exclusions as well as the various policy stipulations. All in all, critical illness insurance can be your support during your hard times. So get one before it is too late.  

When looking for your critical illness insurance it is important to search the market, this will ensure that you will recieve the best plan at the best price. There are many different policies available on the market and each of them cover different things. Do your research get a plan that covers you for over 30 illnesses and is a name you recognise. This will stand you in the best possible position should the worse happen.

A critical illness policy pays the policyholder the chosen benefit amount of insurance they have chosen if they suffer a critical illness or they can also add life insurance to the policy so that in the event of a death the benefit will be paid to the family.

The critical illnesses covered are determined by which company you chose.

 The critical illnesses that are typically covered include, Stroke, Alzheimer’s disease, Blindness, Liver Failure, Parkinson’s Disease, (normally before 65) Major Organ transplant, Open Heart Surgery, Aorta Graft Surgery, Third Degree Burns (normally 20% of body surface and 50% of the face), Pre-Senile dementia, Cardiomyopathy, Kidney Failure (requiring dialysis), Chronic rheumatoid arthritis, Loss of hands or feet, Benign brain tumour, Paralysis of limbs, Coma, Aplastic anaemia, Respiratory failure, Systemic lupus erythematosus, Multiple sclerosis, Loss of independence, Deafness, Motor neurone disease(normally before age 65) Coronary angioplasty, Bacterial Meningitis, Traumatic head injury, Heart Attack, Benign brain tumour, Coronary artery by-pass grafts, Cancer (excluding less advanced cases) Heart Valve replacement or repair, progressive supra-nuclear palsy (normally resulting in permanent symptoms) HIV infection (normally caught from a blood transfusion, assault or at work in an eligible occupation), Insulin dependent diabetes mellitus (normally type 1 diabetes), Loss of speech. The above illnesses vary from company to company and a full list of what each company covers will be listed in their policy documents or Key Features. Children up to the age of 18 can be covered at no extra charge.

Children are normally covered for all the illnesses you are except for insulin dependent diabetes mellitus. Children are not normally covered for death or terminal illness.

A Limited number of companies will offer to include the reinstatement option. This reinstatement option can be added to a critical illness policy at an additional premium. Having reinstatement on your policy means that you can acquire a new policy with limited cover after you have made a successful claim from your provider. Typically this limited cover includes, Aorta Graft Surgery, Aplastic Anaemia, Bacterial Meningitis, Cancer – excluding less advanced cases, Cardiomyopathy, Heart Attack, HIV Infection, Kidney Failure, Liver Failure, Major Organ Transplant, Motor Neurone Disease, Multiple Sclerosis, Parkinson’s disease, Stroke, and Third Degree Burns.

This can only be done so between 12 and 24 months with your provider, after successfully making a claim. The new policy will have maximum benefit equal to your current policy minus cover of which was provided under any replacement option, the cover will also not include any pre-existing condition before that start of the new policy.

You should always check your policy before commencement to establish if the reinstatement option is available and if so, is it automatically included.