What is it?
A Critical Illness plan is designed to pay out a lump sum on the diagnosis of certain specified illnesses. It is often ‘bolted on’ to a life assurance policy as an additional benefit but can also be a standalone plan.
Critical illness cover is a long term insurance policy designed to pay you a tax-free lump sum on the diagnosis of certain life threatening or debilitating (but not necessarily fatal) conditions such as a heart attack, stroke, certain types/stages of cancer, multiple sclerosis and loss of limbs. A more comprehensive
policy will cover many more serious conditions including loss of sight, permanent loss of hearing and a total and permanent disability that stops you from working. Some policies also provide cover against the loss of limbs.
Who is it for?
This type of plan is designed for those individuals or families who want a lump sum if they are diagnosed with a serious illness. As an example of where this lump sum could be used is to repay a loan, mortgage, or perhaps pay for time off work. The lump sum could even be used to pay for any necessary alterations to your home.
The quality of cover and the illnesses covered can vary significantly between different providers. It is essential that this type of cover is considered very carefully and providers’ cover compared before taking a policy.