Put simply, critical illness cover is a policy that pays out an amount if the person covered is diagnosed as having a critical illness. In the same way that home insurance covers your property, a critical illness policy covers you.
Every insurer’s policy is different, but they all have some things in common. For example, critical illness policies usually offer cover for a specific amount of time – for example 20 years – and pay out if the person covered is diagnosed as having a particular critical illness within that time.
You can also choose what type of cover you have:
- level cover, where the amount paid out stays the same;
- decreasing cover, where the amount paid out decreases over time;
- or increasing cover, where the amount paid out increases over time.
Generally, the amount paid following a claim will be a one-off sum of money. Some policies will make payments in instalments.
The critical illnesses covered vary from insurer to insurer. Examples include:
- Heart attack
- Certain types and stages of cancer
- Multiple sclerosis
Very often the details of a critical illness policy contain medical terminology, but most insurers will provide a guide to explain in simpler terms what is or isn’t covered.
It’s also important to check how long a person has to survive for the benefits to be payable, as most will have a survival period. Typically it can be up to 14 days.
As with life insurance, policies may have other options too – some of which may be included at no extra cost or can be selected at an additional cost. Examples would be:
- terminal illness cover – where payment could be made if a terminal illness is diagnosed;
- waiver of premiums – where the premiums would be paid on the policyholders behalf;
- life event changes – the ability to change cover if your situation changes.
These benefits vary from company to company, so it’s always a good idea to check the details carefully before buying a policy.
You may find that critical illness cover can be added to a life insurance policy or can be a policy in it’s own right.
Once you’ve made a decision about which policy’s right for you, you’ll need to make an application. Insurers usually need to assess that application before deciding if they can offer you cover.
It’s important to be honest when completing your application. The most common reason for insurance claims being declined is that questions weren’t answered in full, or they were answered incorrectly.
If the insurer can offer you cover, they'll confirm how much it'll cost and what you'll be covered for. The price you pay will be based on:
- your age
- your health
- how long you want the cover for
- the level of cover you need
- smoker status
With most types of critical illness cover, you have to carry on paying the premiums continuously. If you stop paying premiums, the cover ends and you get nothing back. In many cases the cover can last for many years and, as a result, it’s vitally important you make sure you’re buying the right policy. Most critical illness policies do not have a cash in value.
What policies do Aviva offer?
You can find out more about the life insurance and the critical illness cover we offer by clicking on the links below.