CRITICAL ILLNESS COVER - A BREAKDOWN...
This blog post is going to address the insurance policy that is “critical illness cover”. It is important to know what you are investing in money-wise. Therefore, we have created this short and easy-to-understand blog post for anyone interested in critical illness cover.
What is CIC? Critical illness cover (or CIC) provides you with a lump sum of money if you are diagnosed with certain illnesses or disabilities. The cover is paid in monthly premiums and ensures whilst the policy is on going that if you are diagnosed with any of a list of illnesses/disabilities that you get paid out. The kinds of illnesses that are covered are usually long-term and very serious conditions such as a heart attack or stroke, loss of arms or legs, or diseases like cancer, multiple sclerosis or Parkinson’s disease.
What is the purpose of CIC? The pay-out can help support you during a life changing situation, by giving you money to use towards your outgoing's each month, for example, rent/mortgage and bills. For example, the cover may cover your mortgage in case the illness you face means you can no longer work. CIC gives you’re the opportunity to enjoy a lump sum of money before you die unlike life insurance which only pays out if you die.
How expensive is CIC? Critical illnesscover is more expensive than life insurance. This is because you do not have to die for the cover to pay out, therefore the likelihood of a pay-out is greater. This means the risk for the insurance company to cover you is greater for them so the premiums do increase compared to life insurance. However, with this being said, because you are at a greater risk of a claim, the chances of a pay-out for you are also greater.
Also, the same theory applies to critical illness cover that applies to life insurance. The younger you are, the less expensive the premium will be.
How do I go about getting CIC? You can get CIC as a stand-alone policy or you can get a life insurance policy that includes CIC. The best way to arrange a CIC policy is to get in contact with your insurance broker where they can conduct a thorough fact find and identify the best plan for your needs.