5 ways you can use the pay-out from your critical illness cover

One of the main reasons behind getting any sort of life insurance policy is to give your loved ones a financial safety net and peace of mind that both you and your loved ones would be able to get by if you were to be sadly diagnosed with a critical illness.

A pay-out can help cover the costs of medicine you may need, rehabilitation and other expenses during your recovery but there are more uses than you might think. Here are five ways to use this money wisely.

What is critical illness cover?

Let’s start with the basics.

Critical illness cover is a type of life insurance policy that can pay-out a tax-free lump sum if you were to be diagnosed with a critical illness as defined in your policy conditions.

One of the key benefits of critical illness cover, is that you can make a claim on your cover, whilst you’re still alive, meaning that you could also benefit from the money, as well as your loved ones too! When any type of life insurance policy pays out, there is no one set thing that you have to use the money for - the choice is yours.

1. The essentials

It’s easy to overlook the little things sometimes and there’s so many things that nearly every household will pay for each month. If you’re the sole earner or even if you have a dual income household, who would pay for the essentials if you were no longer able to work due to your illness?

The pay-out from your critical illness policy could be used to help you and your loved ones afford the basics whilst you spend time recovering. Here’s just a small example of the essentials the pay-out from your policy could help you afford:

• Food shopping
• Your regular bills
• Childcare costs
• Vets bills
• Council tax
• Mortgage or rent payments
• Travel costs if specialist hospitals are far away
• Modifications to your home as a result of your diagnosis
  
  

2. A holiday of a lifetime

So many people choose to use their pay-out to fulfil their bucket list, as a way to make some lasting memories with their loved ones and do something they’ve always wanted to do. At the end of the day, the money would be yours to do what you want with.

Additionally, so many critical illness policies include children’s cover within the policy, meaning that if your child were to sadly be diagnosed with a defined critical illness, you could receive a pay-out of a portion of your cover, whilst also keeping your policy in place. The money that children’s critical illness could provide can be used for so many different things. Dionne, one of our customers, found out all about how this pay-out can change everything, when her daughter Sky, was diagnosed with type 1 diabetes.

Dionne split her money into three, “Of course the money always helps, a third of it has gone towards savings for the children’s future and a third of it has gone onto the mortgage - it’s really helping, especially with the cost of living at the moment.”

The rest of the money has gone towards a holiday of a lifetime, “The last year has been so tough on everyone so I have booked a once in a lifetime trip to Lapland for all of us. Having this money has enabled me to do this and to give the girls a much needed and well deserved treat after such a difficult time. I am going to tell them a day before, it’s a total surprise for them!”

3. Changes to your lifestyle

No one knows what’s around the corner and depending on your diagnosis, you’ll likely have to make some changes to the way you live your life. Having a chunk of backup cash to fall back on could help ensure that all your medical costs are covered during diagnosis and treatment for a critical illness.

Setting aside part of your pay-out to cover any additional medical expenses, such as those for hospital stays or transportation, medicines or medical equipment. It also could be wise to set some money aside for any care and rehabilitation services you may need, further down the road.

4. A nest egg

Critical illness pay-outs are there to provide for you and your loved ones during a time when you need it most. But setting aside a portion of the lump sum to plan for your loved ones future would be a great way to utilise the pay-out from your cover.

If your critical illness took a turn for the worse and you were no longer here, the tax-free lump sum from your critical illness policy could be put aside as a nest egg for your loved ones. With this money put to one side, your loved ones would have peace of mind simply just by knowing the money is there, ready to access when they need it.

5. Help with your mortgage

A mortgage is one of the biggest debts most of us will ever have in our lives. Consider how your loved ones would be able to afford the regular monthly mortgage payments without you there.

Your income could be affected for some time, if you were diagnosed with a defined critical illness. How your loved ones would afford to keep up with these payments, without the help of your income?

At Busy Bee, we can help you take out a life insurance policy to specifically protect your mortgage. However, if you don’t have a mortgage protection policy in place, then you could just put aside a portion of your critical illness cover to help keep on top of your mortgage payments.

Why this cover?

The stats are seemingly getting scarier by the minute and your critical illness cover would be there to provide you with peace of mind and a tax-free lump sum, if the worst were to happen.

Having a critical illness policy in place means that you could benefit from peace of mind, knowing if you or your little one were to be diagnosed with a defined critical illness, your family would remain financially stable.

Please don’t wait. If you don’t already have a critical illness policy in place, our experts can help you find the cover that’s right for you in just a few simple steps.