Critical Illness Insurance

What is this?

Critical Illness Insurance is a policy which is intended to pay a lump sum to the insured on diagnosis of a disabling illness if this occurs within a specified term. The term may be for any period but may be limited by the age of the applicant and the policy will pay out at any time within that period as long as premiums have been paid on time and the policy terms have been complied with.

Who is it for?

Critical Illness policies are usually used as a means of paying off the whole of the balance of a debt, such as a mortgage, on diagnosis of a disabling illness to one of the borrowers. With advances in modern medicine, it is now very likely that you could survive an illness that, several years ago, would have been fatal. However, these illnesses could severely disable you and prevent you from earning a living. It is also likely that you would require care for the remainder of your life. If a couple take out a mortgage together, based on joint incomes, it would be difficult or impossible for one partner to maintain payments following the disability of the other partner. Critical Illness Insurance policies are usually set for a term that matches or exceeds the term of the mortgage and the sum assured may be level, increasing or reducing.

Who is it not for?

There are age limits beyond which Critical Illness Insurance is not normally affordable. Also, this insurance is not usually available beyond the age of 65. It is not usually possible to arrange Critical Illness Insurance for applicants with life-threatening illness or conditions or in some professions. Alternatively, certain pre-existing conditions may be excluded from the insurance policy.