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While the prospect of suffering from a critical illness is not something many of us want to dwell upon..

While the prospect of suffering from a critical illness is not something many of us want to dwell upon, it is still important to protect our financial situation should the unthinkable happen.

So, when taking out your mortgage, taking out critical illness cover at the same time should be something you take into consideration. It will provide you with the financial security you need when you are unable to pay your mortgage due to your serious illness.


What is a critical illness policy?

If you are diagnosed with a critical illness during the term of your policy, provided you have kept up with your premiums, you will be paid a tax-free lump sum. When the policy ends, all protection will stop.

Upon taking out the policy, you can decide how long you want it to last. So, you might want to stay covered until your children have grown up, or you might want it to last until your mortgage has finally been paid off. Critical illness cover is often available as a combined policy with term life insurance. In these instances, you can often only claim once. For example, if you get a cash payout after being diagnosed with cancer, the policy is effectively finished. There is usually no life insurance payout if you die at a later date.

Who needs a critical illness insurance policy?

You should consider a critical illness insurance policy if:

  • You don’t have the savings in place to cover your outgoings if you are too ill to work.
  • Your employer doesn’t offer a benefits package to cover a period of long-term illness
  • You’re single, and you want a policy to ensure your mortgage is paid should you become ill.
  • You have a family, and you want to ensure they are provided for should you become sick.

In theory, most people should consider critical illness insurance, but it can vary from person to person. If you don’t have regular financial commitments or people dependent on your income, then you might not consider it necessary. On the other hand, if you and your family are dependants on your salary, and there are no other means to cover your mortgage payments, then critical illness insurance is the protection you will need.

How much cover do I need?

Traditionally, critical illness plans pay out the full amount regardless of how serious your illness actually is. However, some plans offer severity-based cover, where the payout you receive depends on how bad your illness is. When deciding on how much cover you need, think about what you would lose if you were unable to work due to illness. You should also think about the financial commitments you would still have, such as children or a mortgage. To help you make an educated decision, use our life insurance calculator to figure out how much cover you might actually need.

What illnesses are covered?

Illnesses will vary between insurers, so it’s vital that you check the small print on the policies being offered before you buy. Common conditions covered include cancer, heart attacks, organ transplants, and strokes. However, some insurers might exclude those cancers that are easily curable, and they might rule out pre-existing conditions, or other illnesses that are deemed less severe.

It’s also worth pointing out that a critical illness and a terminal illness are different things. Most standard life policies will cover those illnesses where you are expected to die within 12 months of diagnosis. If you do decide to pay for critical illness cover, you might be able to get it cheaper by combining it with normal life insurance.

Get Advice On Critical Illness Cover

Opting for critical illness cover is your choice. If you decide against it, you might find yourself in financial difficulty down the line, so this is something you need to take into consideration, not only for yourself but for your family too. If you do decide to insure yourself, be sure to check the policies in question so you are fully aware of what is being covered.

For further advice, we would be happy to answer any questions you might have, so please do get in touch with our team.