Do you really need Life and Critical Illness Insurance? October 23, 2009
Posted by admin in : Buying Life Cover, Life Insurance Policies , trackbackOver the last 20 years or so the take up of Life and Critical Illness Insurance has increased dramatically as the benefits of this type of cover become better known.
This is particularly true for people who are setting up a new mortgage who perhaps would previously have just made do with ordinary term assurance. Nowadays however couples and singles want the re-assurance that if the worst happens they won’t have the worry of paying the mortgage.
This is where combined Life and Critical Illness cover be of value because it provides protection which will ensure that if the worst does happen, money is quickly provided as either an ongoing tax-free income or tax-free lump sum. One note of caution though, combining life and critical illness cover in the same policy might be slightly cheaper than taking out separate policies, but if you should make a claim on the critical illness option the whole policy may cease leaving you without life cover when you may be considerably older and in poor health.
In its most basic form Life and Critical Illness Insurance can be relatively inexpensive by providing cover on a reducing basis, perhaps to cover a repayment mortgage or loan. Another way of keeping the cost of Life and Critical Illness Insurance low is to look for a plan which provides only basic Critical Illness Insurance. These plans usually cover the three main critical illness conditions such as Cancer, Heart Attack and Stroke which represent the vast majority of claims. This is a bit like insuring your car third party instead of fully comprehensive but if money’s tight this type of cover is better than none at all.
Life and Critical Illness Insurance provides remarkable value particularly for younger people. For example a male non-smoker aged 25 would pay just £16.21 per month for £150,000 of decreasing Life and Critical Illness cover over 25 years. This however assumes that you are in good health with no family history of critical conditions.
The premiums for this type of cover are based upon the perceived risk. The fact is that if you are in your 40’s you have much more chance of contracting a critical condition than dying before you are 65. And whilst you have a good chance of surviving these conditions your finances may not be so lucky!
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