Critical Illness Reviews

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.