Life and Critical Illness Protection

Life and critical illness cover can benefit various individuals, including:

Breadwinners/Primary Income Earners: Individuals who provide financial support to their family or dependents can ensure their loved ones are financially protected in the event of their death or critical illness.

Parents: Parents can secure their children’s future by having life and critical illness cover, ensuring that their children’s education, daily needs, and other expenses are covered even if the parent is no longer able to provide for them.

Homeowners: Homeowners with mortgage or loan commitments can use life and critical illness cover to ensure that their debts are covered, preventing their loved ones from facing financial burdens in the event of their death or critical illness.

Individuals with Dependents: Those who have aging parents, disabled family members, or other dependents who rely on their financial support can benefit from this coverage to maintain their dependents’ quality of life.

Business Owners: Business owners can protect their businesses by having life and critical illness cover, which can provide funds to cover business expenses, repay debts, or facilitate business succession planning in case of death or critical illness.

Individuals with Financial Obligations: Anyone with financial obligations like personal loans or credit card debts can ensure that these obligations are covered, relieving their loved ones from the burden of these liabilities.

Self-Employed Individuals: Self-employed individuals who do not have access to employee benefits like group life insurance can benefit from individual life and critical illness cover to protect themselves and their families.

It is essential to assess individual circumstances and financial goals when considering life and critical illness cover. Consulting with a financial advisor or insurance professional can help determine the most suitable coverage based on specific needs and requirements.

It varies depending on what you are looking to protect. If cover is taken out to protect as debt such as a mortgage, the amount of cover should equate to the mortgage balance plus any fees that have been added to the loan, the term of the cover should match the term of the mortgage.

If you are looking to protect family members rather than a loan in the event of your death or becoming critically ill then the amount can be whatever you wish. You should discuss with an adviser how your loved ones will be financially disadvantaged by your death/critical illness and calculate how much money they would need to maintain their standard of living and how much you would be prepared to pay for the cover each month.

The simple answer is no, these types of have no cash in value at any point, if you had not made a claim by the end of the policy term then the policy will just cease.

If a policy is in joint names any policy proceeds would be paid to the surviving party on the policy. However, if a policy was in a sole name the policy proceeds would be paid into the deceased estate, this can cause delays in loved one receiving the money as soon as possible.

This can be avoided by writing any sole life policies into Trust, this places the ownership of the life policy in the hands of a Trustee who can pay the policy proceeds to nominated beneficiaries without having to wait for probate to be granted.

Life and critical illness cover differs from standard life insurance in terms of the coverage it provides. Here are some key differences:

1. Coverage Focus: Standard life insurance primarily provides a death benefit, paying out a lump sum to beneficiaries upon the policyholder’s death. In contrast, life and critical illness cover includes both a death benefit and a critical illness benefit. It pays out a lump sum if the policyholder is diagnosed with a covered critical illness during the policy term, in addition to the death benefit.

2. Purpose: Standard life insurance is designed to provide financial protection to the policyholder’s beneficiaries in the event of their death. It helps replace the lost income and covers expenses such as funeral costs, mortgage payments, and living expenses. Life and critical illness cover goes a step further by offering protection against the financial impact of critical illnesses, providing funds for medical treatment, lifestyle adjustments, and other related costs.

3. Payout Triggers: For standard life insurance, the policy payout is triggered solely by the death of the policyholder. In the case of life and critical illness cover, the critical illness benefit is triggered upon diagnosis of a covered critical illness. The death benefit is still paid out if the policyholder passes away due to any cause during the policy term.

4. Premiums: Life and critical illness cover typically has higher premiums compared to standard life insurance due to the increased coverage provided. The inclusion of critical illness coverage adds an additional layer of risk for the insurance provider.

It’s important to note that the specific terms and conditions may vary depending on the insurance provider and policy. Understanding the differences between these types of coverage can help individuals choose the most suitable option based on their needs for financial protection and peace of mind.

Yes, it is often possible to customise life and critical illness cover to suit your specific needs. Insurance providers understand that individuals have unique circumstances and requirements, and they may offer options for customisation within their policies. Here are some ways you can typically customise your coverage:

Coverage Amount: You can choose the amount of coverage you want based on your financial obligations, such as outstanding debts, mortgage, and future financial needs of your beneficiaries. The coverage amount can be adjusted to meet your specific requirements.

Policy Term: You can select the duration of the policy, typically ranging from a few years to several decades. It depends on your desired coverage period and financial planning goals.

Critical Illness Coverage: Insurance providers may offer different levels of critical illness coverage. You can often choose the specific critical illnesses you want to be covered for, based on your health concerns and personal priorities.

Optional Policy Add-ons and Benefits: Additional policy add-ons or benefits can be added to your policy for extra protection. For example, you may opt for a disability policy add-on, which provides a benefit if you become disabled and unable to work. Other policy add-ons may include waiver of premium, allowing you to skip premium payments if you become critically ill or disabled.

Premium Payment Options: Insurance providers may offer flexibility in premium payment terms, such as monthly, quarterly or annual payments. You can choose the payment frequency that aligns with your financial situation and preferences.

When customising your life and critical illness cover, it’s important to consider your budget, future needs, and specific circumstances. Working with an insurance professional or financial advisor can help you understand the available customisation options and tailor a policy that best suits your individual requirements.

Life and critical illness cover typically includes the following:

Death Benefit: In the event of the policyholder’s death, a lump sum payment is made to the designated beneficiaries.

Critical Illness Benefit: If the policyholder is diagnosed with a critical illness covered by the policy, a lump sum payment is made to help with medical expenses, treatments, and other financial obligations.

Coverage for Specific Critical Illnesses: The policy specifies a list of critical illnesses that are covered, such as cancer, heart attack, stroke, organ transplant, and certain types of surgeries.

Terminal Illness Benefit: If the policyholder is diagnosed with a terminal illness with a life expectancy of typically less than 12 months, they may be eligible to receive the death benefit while still alive.

Optional Riders and Add-ons: Additional features can be added to the policy, such as disability coverage, income protection, or waiver of premium, offering enhanced protection and flexibility.

It is important to note that the specific coverage and terms can vary among insurance providers, so it is advisable to carefully review the policy documents and consult with an insurance professional for detailed information.

Yes, you may still be able to get cover if you have a pre-existing condition, however the insurer may increase the cover of any cover to reflect the higher risk involved or if critical illness cover is applied for the insurer may place exclusions on the policy. This means you would be covered for some illnesses but not any illness that relate to you pre-existing condition.