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Guide to critical life insurance

Statistics state that you are four times more likely to suffer from a serious or critical illness before the age of 65 rather than die. However, more people seem to be opting for life insurance rather than applying for critical life insurance. Depending on your circumstances, applying for critical illness insurance may be more beneficial than applying for life insurance.

Critical life insurance cover

Critical life insurance is a policy that pays a tax free lump sum upon the diagnosis of a critical illness before a certain age. Depending on provider and type of cover you opt for, some policies will cover a very specific range of conditions whilst others will cover common illnesses and a wide variety of potential critical illnesses.

Who benefits from critical life insurance?

Critical illness life insurance is useful for anyone who has financial obligations, such as a mortgage, and doesn't want to let their children or other family members pay off debts when they become seriously ill and cannot work. Unlike life insurance, which pays out when someone dies, critical illness life insurance enables you to prepare for the worse with a lump sum to help cover financial costs.

What doesn't it cover?

The main problem with most forms of critical illness life insurance is that some policies can be very specific about what they will pay out for, so it's hard to find the right kind of cover.

When applying for critical life insurance you need to make sure you shop around for the best quote, policy and provider. It's imperative that you read and understand your policy fully to ensure you don't become ill and aren't eligible for a payout because of certain clauses in the agreement.

Tips for applying for critical illness insurance

When applying for critical illness life insurance you should look for the best deal, but never settle for the cheapest option; this will usually be the one that doesn't fully cover you and has certain 'get-out' clauses that could leave you without a payout. You need to give complete and honest information in your application, otherwise you may risk your claim being rejected in the future.

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