Critical Illness Insurance

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This cover provides for a lump sum payable on the diagnosis of a serious illness or disability.

If you survive the diagnosis for more than 28 days you will receive the sum assured as a tax free lump sum. The money is yours to keep even if you make a full recovery. Some of the most common diseases covered are cancer, most types of heart disease including heart attack, coronary artery bypass, angioplasty, and aorta surgery. Organ transplants are normally covered, as well as kidney failure, loss of sight or limbs, Alzheimer's disease, pre-senile dementia, coma, etc. Full details of the cover will be provided at the time of your application, as the cover varies slightly between companies. Many companies automatically include cover for your children against a limited number of Illnesses. This extra cover is provided Free of Charge. (For more information see Who needs Critical Illness cover below)

Who Needs Critical Illness Cover?

The simple answer is everybody!

Everybody knows someone who has suffered a Critical Illness, many of whom would have benefited from this type of cover. We all tend to assume that it won't ever happen to us but the statistics show the reality to be somewhat different. Below are details of some of the more common Critical Illnesses claimed upon.

(All information courtesy of ERC Frankona 1999)

A 40 year old man has a 1 in 5 chance of suffering a Critical Illness such as cancer, heart attack or stroke before the age of 65.

For a woman the risk is only slightly lower with 1 in 6 likely to suffer from similar Critical Illnesses.

The most frightening statistic, perhaps, is with regards to the claimants ages. For men most claims are made in the age range between 41 and 50, and for women most claims are made by the under 40 age group.

The major claims areas are as most people would expect, with Cancer being the most common (54% of claims), followed by Heart Attacks (20%) and Strokes (9%).

Cancer

Nearly 220,000 people are diagnosed each year as having contracted one of the forms of Cancer, which would qualify as a claim under the ABI standard definitions for this type of policy.

Heart attack

Each year around 300,000 people suffer a heart attack in the UK.

Coronary artery bypass surgery

There has been a two-fold increase in Coronary artery bypass surgery in the last ten years. 24,000 are now carried out each year in the UK.

Stroke

Stroke is the largest single cause of severe disability in England and Wales, with over 300,000 people being affected at any one time.

Waiver of Contribution

This means that the provider will waive their right to collect the regular insurance premiums of the plan in the event of accident or illness, normally subject to a 6-month deferment period. You can choose a shorter period but this would increase the premium . Both waiver of premium and critical illness can be added to life policies, subject to underwriting.