How Critical Is Critical Illness Cover?

How many Christmas cards did you receive this year that wished you a happy, healthy and prosperous New Year? I think you'd be surprised at how many! So many of us take our own health for granted, never actually stopping for a moment and appreciating that we are alive and kicking. But what happens if suddenly you or a member of your family is struck by a critical illness? Now you wouldn't wish that on anyone, but at the end of the day, it is unfortunately a fact of life for many. If you suddenly became too ill to work, could your family manage financially? If your answer is no, then perhaps 2011 should be the year you consider critical illness cover to make things a little easier if such an eventuality should occur.

According to the Association of British Insurers, we pay an average of £919 per year for the privilege life cover. As such, it's an expensive mistake to make if you're buying into it blind, or worse still gambling on good health. Critical illness cover is sold either independently or as an add-on to a life insurance policy. If you have dependents, and a mortgage- or one of the two- then it is highly advisable you consider this kind of option. According to BUPA, one in four people will develop a serious health condition between their 30th and 60th birthday, which- marketing to one side- is food for thought.

Unfortunately, there are so many possible conditions that can stop you from working and sadly not all illnesses will be covered in your policy. It is impossible for the financial services to cover all possibilities, as with most products they offer. Therefore, it is imperative to seek financial advice over which policy would be best for you. Do a bit of research into your family's medical history; this will give you a better outline to any possible conditions you could incur in the future.

So, here are some hard statistics to get you going. According to Insurance Provider Scottish Provident, a huge 6 out of 10 people in the UK have no protection whatsoever, 35% have life cover alone and just 13% choose a policy that protects in the event of critical illness. Which band do you fall in? These statistics are shocking, especially when you consider how much debt must be incurred from those without any protection at all.

This difference between the numbers of people with standard life insurance, compared to those with critical illness shows many customers may not have a truly comprehensive understanding of the marketplace. Understandable, really, as in 2006 the FSA reviewed the life insurance market. It found that firms needed to make significant progress when it came to transparency, and the clarity of information provided to potential and current customers alike.

In the simplest terms, critical illness cover protects an individual if they suddenly contract a critical illness. The UK's biggest killers, heart disease and cancers are automatically covered in health insurance policies. Similarly, strokes, cancers, Parkinson's disease, kidney failure and Alzheimer's disease are all generally covered. However, most policies specify that the individual must survive a certain length of time following their diagnosis, usually between 1 to 2 weeks, in order to receive the payout. Therefore, it is important to thoroughly understand the policy you are considering.

Most providers have policies that cover over 20 illnesses, for example Friends Provident covers a massive 37 different illnesses. The complications really emerge though regarding illnesses that can be critical but most people can live a reasonably normal life with. Take Diabetes, most suffers can lead a relatively normal life for years and years. Though, there are instances where the disease can lead on to other health complications such as problems with their body's extremities. Now if someone was to lose the use of their feet, you would consider it a critical illness that should be covered as it would undoubtedly prevent them working. And most policies do cover this, if the loss of extremities was a result of anything other than diabetes. Yes that's right, if someone was to lose their feet and hands as a result of diabetes, it would not be insurable. As the fifth most common cause of death across the world, this is a shocking fact.

Of course there are various help points for diabetics, for example Diabetic Life who operate on the market for exactly this reason. But the point still remains. So you must decipher if obtaining critical illness cover will be of true benefit for you. When you weigh up the potential benefits of an all inclusive life insurance and illness package, I personally believe the pros would certainly outweigh the cons.

So how critical is critical illness? Well it is, as with most things, a personal matter, there is by no means a definitive answer. It is probably worth looking in to mind you. Gain some financial advice, do a bit of your own research in terms of your current financial situation, your current health and your family's medical history and you never know, obtaining critical illness cover could well be the best decision you have ever made.


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