Not all critical illness insurance coverage is the same. Depending on the provider you choose and the policies they offer, the level of protection can be very different.
However, there are some things that you should be sure are included in your policy. And if you don’t see them in your policy, ask your insurance provider before signing on the dotted line and make sure they are incorporated.
1. Breadth of Cover
All policies need to stipulate exactly what conditions they cover and at what level of severity.
Any critical illness insurance must cover the seven core conditions (Heart Attack, Cancer, Major Organ Transplant, Coronary Artery Bypass, Stroke, Multiple Sclerosis and Kidney Failure) however if you have a particular worry or concern, ensure that your policy includes that illness. And, if it isn’t stipulated in the contract specifically, ask that it is included before you sign.
2. Terminal Illness
Your policy should specifically state whether it will pay the full sum when you are diagnosed as terminally ill.
Though this should be a standard entry in all critical illness cover, there can be an extra clause which means this claim would become invalid in the last two years of the life of the policy.
If such an exclusion is included in the policy you are considering then it may be worth looking at alternative products to see if they can offer the same level of protection without such a limitation. If this is not possible, it is always worth talking to the insurance provider to see if such a penalty can be taken out or you could also consider renewing your insurance protection early, so that you are never actually in the last two years of the contract.
3. Total and Permanent Disability
Though almost all critical illness policies will include cover for Total and Permanent Disability (TPD), the way in which such a term is interpreted differs between providers.
The main confusion arises from whether payout should occur if the policy holder is unable to carry out their own occupation, a suited occupation or any occupation at all. Furthermore the definition of what ‘total’ and ‘permanent’ means can also be subject to interpretation.
If you are under any confusion as to what is covered within your policy then ask your insurance provider for clarification. There should be clear guidelines available and if it is not part of your terms and conditions then you can request further details.
4. Severity Based Cover
Traditionally a critical illness insurance policy has been used to pay out on diagnosis of a serious illness or disability. However, with the advancements in medical technology, what is now considered ‘critical’ or ‘serious’ is also open to question.
To combat this change, critical illness cover can now provide protection against less severe forms major diseases for which they will pay out a proportion of the full sum insured.
This severity based cover is now included as standard in many critical illness insurance policies and if it is not stipulated in yours, then you should either seek inclusion from your provider or consider an alternative policy.
See Also:
- Financial Jargon – Investment Terminology for Beginners
- Home Owner’s Insurance
- First Time Buyer Mortgages
- What is Critical Illness Insurance?
- Income Protection Insurance
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This article was written by Seb Johnson for critical-illness-cover.org. To find out more about critical illness insurance please visit their website at http://www.critical-illness-cover.org
Image courtesy of Nutdanai / FreeDigitalPhotos.net
