What is Critical Illness Insurance?
Critical illness insurance is a type of insurance that pays out a lump sum benefit if you are diagnosed with a covered critical illness. These illnesses typically include conditions such as cancer, heart attack, stroke, organ transplant, and others specifically listed in your policy. Unlike health insurance, which covers medical expenses, critical illness insurance provides you with a cash benefit that you can use as you see fit.
Why Do You Need Critical Illness Insurance?
Critical illness can lead to significant medical expenses, including treatments, hospital stays, and medications. The lump sum payment from your critical illness policy can help cover these costs.
A critical illness can often result in a loss of income due to time off work or even the inability to return to your job. The insurance payout can replace your lost income during your recovery period.
The lump sum can be used to pay off outstanding debts, such as mortgages, loans, or credit card balances, ensuring that your financial obligations are met.
It can provide funds for additional care, alternative treatments, or making necessary lifestyle adjustments during your illness and recovery.
Knowing that you have financial support in place can reduce stress during a challenging time, allowing you to focus on your health.
How Does Critical Illness Insurance Work?
- Purchase a Policy: You buy a critical illness insurance policy from an insurance provider.
- Choose Coverage Amount: You select the coverage amount you want, considering your financial needs and budget.
- Pay Premiums: You make regular premium payments, typically monthly or annually, to keep the policy in force.
- Diagnosis: If you are diagnosed with a covered critical illness during the policy’s term, you file a claim with your insurance company.
- Claim Approval: Once your claim is approved, you receive a tax-free lump sum payment from the insurer.
- Use of Funds: You can use the funds as needed, whether for medical bills, living expenses, or any other financial need.
Selecting the Right Critical Illness Policy
Choosing the right critical illness insurance policy involves careful consideration of the following factors:
- Coverage: Ensure the policy covers critical illnesses that are relevant to your health and family medical history.
- Benefit Amount: Determine how much coverage you need based on your financial obligations and potential medical expenses.
- Premiums: Assess premium costs and find a balance between affordability and coverage.
- Policy Terms: Read and understand the terms and conditions, including waiting periods, exclusions, and renewal options.
- Provider Reputation: Research the insurance company’s reputation, customer service, and claims settlement history.
Contact Us
We`re here to support you.
At the Mortgage Collective you will get a dedicated adviser that is CeMAP qualified who will help you throughout the entire process. They will take time to understand your circumstances and provide advice that right for you.
0203 923 9333
brokers@mortgagecollective.co.uk
