Critical illness insurance is in most cases essential especially considering how much you would suffer financially if you were to be diagnosed with a critical illness or become permanently disabled. We would always advise that you read the policy conditions carefully for full details of what conditions are covered and not covered by that particular policy.

Critical illness cover pays a cash lump sum on diagnosis of one of a number of specified critical illnesses, or the undergoing of specified surgical procedures or medical treatments. Most critical illness policies will include a benefit that will pay out if one of your children was diagnosed with a critical illness, this comes at no extra cost and will not affect your own personal benefits from the policy.

Common misconceptions such as you have to be expected to die or be unable to work to make a claim are incorrect as neither predicted death, or your ability to work, will influence if critical illness policy will pay out.

See Fig 1

Level term insurance:  The sum assured is fixed throughout the term of the policy paying an agreed lump sum if you suffer a critical illness during the policy term.
When: Ideal wherever a liability or protection need exists that will not reduce over time such as an interest only mortgage for example.
Pros:  Pays a fixed lump sum and represents better long term value for money than decreasing term insurance as your monthly premium always buys a fixed amount of cover.
Cons: More expensive than decreasing term critical illness insurance and over a period of time the buying power of the sum assured can be eroded by the effects of inflation.

See Fig 2

Increasing term life insurance: This is more of an add-on option rather than a class of term insurance policy in its own right. This type of policy allows you to increase your sum assured either on a fixed basis such as 5% compound each year or in line with an index such as the RPI (retail price index) or national average earnings index (NAEI.)
When: Wherever you require the sum assured to offer the same buying power in the future such as replacing income for example.
Pros: Protects against the effects of inflation and ensures the sum assured rises in line with the cost of living and provides adequate long term protection.
Cons: Some insurers charge for this type of cover at outset and all will increase your premiums each time you increase the sum assured, some by a fixed amount, some by an unspecified amount.

See Fig 3

Decreasing term or mortgage linked insurance: The sum assured falls each year in a predetermined way, usually to zero by the end of the term.
When:  Wherever a liability or protection need reduces over time such as a repayment mortgage.
Pros: Less expensive than other types of critical illness insurance policies.
Cons: Although less expensive at outset it doesn’t represent as good long term value for money as although your cover reduces your premiums do not. Your sum assured may decrease faster than your mortgage leaving a shortfall in cover.
Family Income benefit: Another form decreasing insurance providing a monthly or annual sum/income until the end of the policy term.
When: Where there is a need to provide or replace an income.
Pros: Less expensive than level term cover and provides an income rather than a lump sum.
Cons: Sum assured is effectively decreasing and provides limited cover towards the end of the policy term.
Additional features: 
TPD (Total  Permanent disability) can take the form of own occupation, suited occupation, work tasks. Buy back option, guaranteed insurability option, waiver of premium, fracture cover (limited to certain insurers). Speak to our advisors for any questions and about how these additional features could benefit you.

The cost of critical illness cover is usually calculated from the level of benefit you receive in the event of a claim. Typically as with most insurance policies, the more cover you have then the higher the premiums. This makes the structuring of your policies important when it comes to budget and having the maximum level of cover in place.

Our advisors are fully qualified to be able to help guide you through the best cover options available and discuss in more detail how critical illness works and which companies cover the most illnesses. We are a whole of market broker so in terms of advice, we are passionate about offering you the best level of cover within your budget.

Choosing the right insurer for your individual circumstances is the key to keeping the cost of your cover as low as possible. Any quotes you receive on-line, from any insurer, are known as screen prices and offered on basic information and are subject to change on application.

Medical health, family history, occupations, past times and lifestyle can all influence the cost of your cover and often do. No one insurer is best suited for all circumstances and choosing the insurer that will give you the best real price is essential.

Critical illness cover can often prove to be expensive. An alternative to a large sum assured is to consider insuring for an amount of money that, if you were diagnosed with a critical illness, would provide an amount sufficient to fund a 12 to 24 month recovery period.

Covering individual considerations such as a repaying a mortgage and protecting children separately with a combination of policy types for different amounts and different terms is often more cost effective than blanket insuring with one policy.

For advice on how best to approach your insurance speak to one of our advisors and they can almost always show you a way to approach your insurance in a way that will reduce your costs and probably increase your cover.