What is life and critical illness cover?

Life and critical illness cover is a form of insurance which combines both life insurance and critical illness insurance into one all purpose policy. Life and critical illness cover is also known as life and critical illness insurance, and is often cheaper when purchased as one, rather than purchasing the two different policies separately.

Life and critical illness cover will pay out a lump sum family to a customer if they are diagnosed with a critical illness, and to the family of a customer if they were to die.

Why do I need life and critical illness insurance?

There are two main reasons why people are no longer able to earn money to provide for their families and to look after their financial responsibilities. One is death, and the other is because of a critical illness. If you ask yourself how your family would cope financially if you were to die tomorrow, and the answer is they wouldn’t, then life and critical illness cover is for you.

Even those who only look after children could need the policy, as your time is worth money, and child care without you there to look after them could be very expensive.

How does a life and critical illness policy work?

The two different forms of policy are effectively merged into one monthly premium payment, but still work in much the same way they do in their individual form. Life insurance provides a customer’s family with a lump sum payment in the customer dies during the term of the policy. This lump sum is usually used to pay off a mortgage, but can be used for any number of reasons.

Critical illness insurance continues to work in the same way it would as a standalone policy, and looks after a customer if they are diagnosed with a critical illness, and survive the survival period. The critical illness must be on the insurers list of valid illnesses, and the survival period is a period of time after first diagnosis that a customer would live to make a claim. This period varied from insurer to insurer but is generally around 28 days.

Customers with an illness from the list, who go on to make a claim will be able to claim for a tax free lump sum that they can use to improve their quality of life during recovery, or to pay for private medical care.