Summary

The issues you should reflect on when taking out critical illness cover and the rangeof companies proffering thiskind of policy.

Your mortgage lender may offer you quite a few financial products including critical illness cover. But, as they are not specialists in this market, you will most likely find a better offer elsewhere.

The level of cover on offer is just as vital as the premium when seekingcritical illness cover. The policies from Nationwide and Alliance and Leicester are very restricted according to an adviser at LifeSearch, a telephone and online life assurance broker. Legal and General covers only eight critical illnesses, with Friend Provident covering just 9, whereas the market leader, Aviva, covers 38.

Parkinsons, Aids, loss of speech, deafness, blindness and diabetes are some of the illnesses not covered by some of the High Street names. The Directorsays that it is not worth consideringa policy, which insures less than 24 conditions.

An umbrella term built into all policies is ‘total and permanent disabilities’, this term means you are insured for any condition, which prevents you working ever again.

You must be watchful of the wording as some plans cover ‘any occupation’ whereas others only insure your ‘own’ occupation. You will not get a settlement under a ‘any occupation’ policy unless you are utterly incapable of carryingout a job, however menial. Therefore The Directorrecommends you sign up for a ‘own’ occupation policy.

There are a large number of companies as well as Swiss Life who offer comprehensive insurance including Standard  Life, Norwich Union, Liverpool Victoria, Scottish Provident, Scandia, Zurich Life, Friends Provident, Scottish Equitable and Legal and General..

For many years Life Insurance Cover   has been sold by mortgage lenders. This resulted in lots of people never buying critical illness insurance. There are 4 times as many claims on critical illness policies compared to life policies, when the consumer has taken out both kinds of policies.

Life insurance cover is tremendously important, specially if you have dependents, as they will welcome the lump sum settlement on your death. On the other hand critical illness insurance ought to be the priority if you have debts to settle, above all a mortgage. The senior adviserconsiders critical illness to be essential as it covers the cost of your house and food, even if you are ill and unable to work.

The monthly payments will be larger if you are a smoker and will also be more expensive if you are older. A decreasing term policy, which is targeted at people only wanting to insure the cost of their mortgage, is the cheapest.

One of Savill’s customers, a 27 year old non-smoker, who wanted150,000 pounds cover from a critical illness, long term policy, was quoted £15-50 per month, which rose to 25 pounds 50 pence for smokers. However a Directorfrom Tesco Finance recommended a policy, which gave both life insurance and critical illness cover for £16-60 a month, so it would be well worth paying a slightly higher premium.

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