A trawl of price comparison sites on the internet in search of critical illness cover providers, revealed over 30 companies in most listings, all offering a variety of critical illness insurance policies.
Basically, critical illness cover offers protection to the policy holder (and many policies extend this to other family members) in the event of the diagnosis of a critical illness during the term of the policy. The policies on offer differ in a number of common ways:
- In terms of the number of the identified critical illness conditions that the individual policy provides cover for - varying in number from 2 or 3, up to 160 named conditions! The number covered by the majority of policies range between 40 and 50 and commonly include childhood illnesses, cancer, heart attacks and strokes.
- Critical illness policies usually have a qualifying upper age limit - most commonly between 59 and 64 - although two policies found on price comparison sites provided cover up to the ages of 59 and 74 respectively.
- The maximum amount of cover available through specific policies in the event of a claim is also identified. This varies considerably between the smallest of £25k and the maximum extending up to £3m, although the internet research found that the majority of policies offered cover closer to the upper figure.
Critical Illness Cover can be purchased as a stand alone policy or in a combination with Life Insurance Cover, with some providers offering joint policies.
Because the conditions covered vary from provider to provider it is important that people looking for CIC cover discuss this with an advisor. Additional cover may be desirable if there is a family history of an association with a particular illness.
While most policies will generally cover seven conditions - cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke - in the small print, certain cancer forms may be excluded.
CIC policies are not savings or investment products and have no cash value unless a valid claim is made. This kind of life insurance pays out the sum insured only if the insured person is diagnosed with one of a range of specified critical illnesses.
Looking at the value in having CIC cover, the good news that we are living longer could be balanced by the potential for bad news; that within the extra lifespan there is a greater likelihood of any of us suffering a critical illness at some point in our lives.