How does it work?

Similar to life insurance, you pay monthly premiums for the term of your policy, and a lump sum will be paid out if you are diagnosed with an illness covered by the insurance during that time. Often insurers will only pay out when your illness has reached a certain level of seriousness. The cost of your premiums depends on a range of variables, such as:

  • Your age
  • When you buy the policy
  • Your lifestyle, hobbies, and health

Your premiums are likely to be higher if you take out the protection later in life, when you are more susceptible to serious illness. Or, if you are a smoker or have pre-existing medical conditions, then that will increase your premiums for similar reasons. If you don’t make a claim during the term of your insurance, then you don’t get the money back.

What’s covered?

It is important you know exactly what is covered and how much you would get in a payout before you take out this form of protection. There are around 40 conditions most providers will cover, such as heart attacks, cancer, blindness, deafness and strokes.

However, you will usually need to purchase a comprehensive insurance plan to cover Alzheimer’s or losing a limb, and for pre-existing conditions, too. Be sure to check the terms and conditions of your protection before you purchase, to ensure you have what you need covered.

Protection can be expensive, but the payout is worth it should you need to claim. Make sure you know how much you will receive for a claim, and that it is enough to cover your outgoings if you need to take extended time off work. When buying your insurance, include all of your medical history. This may increase your premiums, but your protection will cover everything.

Do I need it?

The reasons why you may need critical illness insurance are similar to those for taking out life insurance. So, if you have calculated you should take out life insurance, you will need to consider protection against serious illness, too.

Can you cover your outgoings during your period of illness? This dramatic change in your life can affect your income as the breadwinner, a dual-earner or a stay-at-home parent. If you’re not the main earner, it is likely the main earner will have to work less to help care for you and the family.

Calculate your spending and whether you’ll be able to manage financially with the changes to your income. Are you able to dip into your savings, or rely on your partner’s income?

Bottom line

Just as life insurance will guarantee your family is looked after if you pass away, critical illness insurance will make up for shortfalls while you aren’t able to work. You will likely need protection if your savings aren’t enough to sustain you while you are ill, or if state benefits aren’t enough to make up the difference. While many employers will offer benefits to cover long-term sickness, purchasing a policy may prove more reliable if there’s a chance you’ll change employers.

If you have life insurance already, check your policy: some life insurance policies provide protection against serious injury.

If you don’t have this insurance, Yes Insurance Services is here to help you with critical illness protection, life insurance and much more. We’ll help you come up with the right plan for you. Contact us today for a free consultation.

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