Sabtu, 18 September 2010
Critical Illness Insurance – Another Scam?
Unless you have substantial savings, even in the UK, contacting a serious illness, such as cancer, can be a very costly affair. Above all, not only do you need to consider how contracting such a critical illness will affect your savings in any medical care bills, but you also need to consider that you may well not be able to earn any income to cover you day-to-day expenditure. As a result, making sure you take out a critical illness insurance may well be one of the wisest and astute financial decisions you make.
What Is Critical Illness Insurance?
In short, a critical illness insurance policy is very much like any other insurance policy you take out. Here, however, your premiums go towards insuring that you do not contract a critical illness. In the event that you do contract a critical illness, your UK insurance provider will pay you out a tax-free lump sum to help you cover the day-to-day costs of having to live with your new medical condition.
Are There Any Limitations With Critical Illness Insurance?
Yes; it is essential that you look at the list of critical illnesses that your insurance policy covers, as these will be the only illness under which the policy will pay-out. In other words, the UK insurance provider will not pay-out on the policy simply because you have a doctor’s certificate that you have a critical illness, it needs to be one of the designated critical illness.
Moreover, if you are considered by the UK insurance provider to be a high risk – for example, if you smoke – then it is likely that either you will not be able to obtain the critical illness insurance, or your insurance premiums will be significantly higher than if this were not to the case. Importantly, you will need to disclose whether or not you have any existing conditions, in which case these will likely not be included, and whether or not your family has a history of the illnesses set out in the policy, in which case this will likely affect your premium payments.
How Will I Be Paid?
As mentioned, with a critical illness insurance your UK insurance underwriter will pay you out a lump-sum tax free amount once you contract one of the critical illnesses listed in the policy. Having paid out the lump-sum amount, your relationship with the UK insurance provider will come to an end. In other words, you will not have an ongoing relationship with the insurance provider paying you intermediate payments.
Is It Worth Having Critical Illness Insurance?
The question of whether or not there is any value in you having a critical illness insurance will depending largely on your age, expenses, and whether or not you have any other insurance. Essentially, critical illness insurance covers an area for which other types of insurance can be obtained. However, unlike other types of insurance, this is a very specific insurance policy paying out for a very specific purpose. That said, there is a strong argument that you can never really have too much insurance and will numbers seemingly showing that more and more of us contracting critical illnesses as we grow as an aging population, this type of UK insurance is always useful.