Discounted critical illness insurance...

Critical illness insurance: a cash sum you can keep, even if you make a full recovery 

Critical illness insurance will pay you a tax free cash  lump sum upon diagnosis of any one of a wide range of critical illnesses such as Cancer, Heart Attack and Stroke. Most policies will also pay out if, due to accident or sickness, you are totally and permanently disabled and unable to continue your occupation. 

The  Chances of a Critical Illness

• Each year almost 220,000 people are diagnosed as new cancer registrations, which would qualify as a claim under the ABI standard illness definitions.* 
• Up to age 65, a man has a 1 in 5 chance and a woman has a 1 in 6 chance of suffering a critical illness.* 
• We are 5 times more likely to suffer from a serious illness than die before reaching age 65.** 

Sources: *ERC Frankona 2000/**Swiss RE 2000

A critical illness could affect you, and surviving could mean a whole new way of life. Critical illness insurance can ease the financial burden, giving you the opportunity of a second lifetime.

How does critical illness cover work?

• The insurance amount remains level throughout the plan term unless you include the indexation option. 
• A cash lump sum is paid if you are diagnosised with an illness covered by the policy and following a survival period normally 14-28 days  following diagnosis. 
• Even if you make a full recovery you can keep the money paid to you. 
• You can take out cover on your life or add your partner as a joint life policy. 
• With a joint life policy the sum assured is paid on the first diagnosis of a critical illness. 

Buying tips

• Work out how much money you would need if you were unable to work long term due to a serious illness. A rough guide of between three and ten times your annual salary is often used. 
• What critical illnesses are covered? There are usually two levels of cover, a basic level that includes the six major conditions and more comprehensive cover that includes many more. 
• Check that permanent total disability is covered.  Otherwise, if an illness or injury leaves you unable to work again and it is not specifically listed, you would not be able to claim. 
• Check the survival time. To claim under a critical illness policy you have to survive for a set time after your diagnosis, usually between 14 days and 3 months. The shorter the survival time the better. 
• Critical Illness cover is not life insurance and wont pay out if you die.  If you need life insurance it is cheaper to buy a combined policy.  Consider buying a policy which will let you continue your life cover  if the policy pays out for a critical illness. 
• Is children’s cover included? Some policies will pay a lump sum benefit if your children are diagnosed with a critical illness covered by your plan. 
• Does the policy include a counselling service? This can be a great help if you develop a serious illness. 

Common Policy options
You can include one or more options to improve the level of protection provided by your policy.  Adding any of these options will increase the premiums.

• Waiver of Premium
  If you cannot follow your normal occupation because of illness or injury, the insurance company will pay your premiums to maintain the benefits under the policy. 
• Indexation
  Your cover and premiums increase each year to stop inflation eroding the real value of your cover over time. Without indexation inflation can seriously eat away at the value of the payout. Even at 3% a year the value of your cover will reduce by 26% after only 10 years. 
• Life Insurance
  You can insure against your death as an option. Be aware that most combined life and critical illness insurance policies will automatically cease if you were to claim for a critical illness leaving you without vital life insurance.  However, there are policies which will allow  the life cover to continue even after a critical illness claim. These are most commonly know as `double event´ plans and are more costly.