What should I consider when buying a critical illness policy?
While price is important, it is worth considering value for money rather than just looking for the cheapest. Having a comprehensive policy is essential, and therefore the number of conditions on the policy is a good place to start. However they should not be your only comparison for quality of cover. For example, some additional conditions, which are not as common, may be less likely to claim on, so paying over the odds to get a few more illnesses on your policy may not be value for money.
Some insurers may have other free additional benefits, such as mastectomy cover, low grade prostate cancer cover or accidental hospitalisation benefit which may payout smaller lump sums if you are eligible without affecting your overall benefit.
It is important that you do not confuse critical illness cover with terminal illness cover. Terminal illness should be free within a normal life assurance policy. It is often a definition on a critical illness policy too. Terminal illness will pay out your lump sum, if you are diagnosed as being terminally ill and your doctor has confirmed you are likely to die within 12 months, as opposed to critical illnesses, which you can recover from. These two policies often get confused, however they are significantly different.
Overall, you are five times more likely to claim on a critical illness policy than a life assurance policy. For this reason life assurance policies will be cheaper than critical illness cover, however do not be automatically put off by price. A smaller lump sum of critical illness, which fits to your budget, a couple of times your annual salary perhaps, may be significant enough to keep you and your family financially supported during such a difficult time.
Having life assurance is a cost effective way of protecting your family; however as suffering a critical illness is a more likely occurrence, critical illness cover should be an important consideration for anyone looking to protect their family’s financial future, if the worst was to happen.