What Are Life And Critical Illness Cover?
Life and critical illness cover are very different from each other. You should always consider all the facts before taking a policy or committing yourself to one company. If you feel the need to compare the life and critical illness cover, then you must know that life cover is not insurance. These policies are often referred to as income protection policies.
Yes, it’s possible. Picking up critical illness cover and life cover at the same time might make a difference to the amount you’ll pay out each month, but it can also mean a gap in financial security between now and the day you die. As such, a policy that provides a mix of the two forms of cover is the ideal solution as this provides a more complete form of cover and peace of mind for those you care for.
The main difference between life and critical illness cover is that the former pays out a lump sum should you die, whilst critical illness covers pays out the cost of treatment in the event of your death. When looking into the life and critical illness cover you should always bear in mind that there will be a lump sum involved. This sum is likely to be substantially higher than the lump sum you’d receive if you took out life insurance.
Life insurance is very similar to life cover. They both pay a fixed amount monthly, with both companies keeping their own profits from the premiums. However, life cover premiums are usually paid monthly for the duration of the policy. Critical illness cover premiums can vary depending on the level of cover you want, the company you take out the cover with and the kind of illness you’re hoping to protect yourself from. Certain illnesses such as cancer and heart disease are rarely included in these policies and hence the cost will be higher.
There are various levels of protection and exclusions that can be included in a policy and these can differ between policies. The price you pay for the protection you need will depend on how much you wish to be covered for and the severity of your illnesses. Some policies may also provide you with extras such as covering accidental death or damage done to your home.
Life insurance will often pay out whether you die or not, but critical illnesses will only payout if you pass away due to this condition. It’s important to think carefully about what cover you need when taking out this type of protection. Some policies only offer life protection up to a certain amount for example up to a set limit for your family. These kinds of policies will usually exclude illnesses where death has been due to an accident, illness or disease. They also tend to exclude those with a terminal illness and those over the age of 65.
There are also some insurers who will offer you a lump sum assured policy. This means that if you were to die or have an accident as a result of your policy, the insurer will pay a sum assured to you. In order to take out this kind of cover the sum assured needs to be big enough to pay off your debts, unless you were to come out of the policy before the specified time. If you were to run into debt for example, the insurers would still want to recover the sum assured.
The life and critical illness cover pays out in the event of your death or an accident. These kinds of cover works in a similar way to tax-free lump sum assurance. You can also choose to include accidental death and damage to property. Most insurers will assess your personal circumstances before offering you a quote so it’s important to make sure you get the right one for your circumstances.