The reality of critical illness cover - what can it actually do?

When you think of life insurance - what springs to mind?

Well, in case you didn’t know, things have evolved since the days of life insurance being just a simple pay-out when the policyholder (the person who took out the policy) passes away. Critical illness cover is the policy everyone needs, keep reading to find out why.

Critical illness cover

This type of life insurance covers you specifically for critical illnesses, rather than just covering you for death.

The lump sum that critical illness cover can provide could help provide a financial safety net for you and your loved ones, if you were to be diagnosed with a critical illness as defined in your policy conditions.

How does this cover work?

Critical illness cover will pay-out a tax free cash lump sum if you were to be diagnosed with a critical illness as defined in your policy conditions. The pay-out from a critical illness policy can be used whilst you are still alive, so you could actually see the difference that this policy could make to your loved ones and also have your say over what happens with the money.

How can this cover actually help?

If you were to be diagnosed with a critical illness, the tax-free lump sum that this policy can pay-out could help your loved ones in so many ways. Here are just a few examples of how the pay-out could help:

• Contribute towards mortgage payments
• Pay for the essentials, like your weekly food shop
• Childcare costs
• Travel to and from hospitals, if specialist treatment is far away
• Pay for any specialist treatment, if you needed it
• Any modifications that may need to be made to your home if your illness required it
• Pay towards the holiday of a lifetime for you and your loved ones
• Tick off a few things on your bucket list
• Pay for specialist care, if you needed it
  
  

Dionne didn't realise

Another incredible benefit of critical illness cover is the added children’s benefit that so many providers now include with their cover.

The true value of children’s critical illness cover was felt by Dionne and her 9-year-old daughter, Sky, this year (2022) when Dionne found out she could claim on her critical illness cover. Not for her but for her little girl, Sky.

Sky was displaying unusual symptoms and didn’t seem like herself. A mother’s instinct never fails, Dionne knew something wasn’t right with her little girl. After using her AIG Smart Health free digital GP appointment, Dionne’s suspicions were confirmed when Sky was diagnosed with type 1 diabetes. To read Dionne and Sky’s full story, click the button below.

What illnesses does children’s critical illness cover pay-out for?

Children’s critical illness cover varies from provider to provider and you can’t get this type of cover as a standalone policy; it's just an add on to the adult’s critical illness cover. There’s no one set list of illnesses that this policy covers, however, the main illnesses covered under children’s critical illness are generally as follows:

• Type 1 diabetes
• Down’s syndrome
• Cerebral palsy
• Cystic fibrosis

Always check your policy conditions to get a full list of what your policy covers.

The reality of this cover

Fast forward to a few months after Sky’s diagnosis and after finding out that she could claim on her critical illness cover for her daughter, Dionne received the pay-out from her policy.

Knowing that you have this cover in place is one thing but actually having to claim on your policy is when the reality really hits. For Dionne and Sky, having a critical illness policy in place made all the difference for them and at a time when they needed it most.

When reflecting on how the cover changed everything, Dionne said, “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 has gone towards helping us adjust to this new life. Having T1 Diabetes doesn’t restrict Sky's diet in any way; she can eat everything a normal child can, but it does mean that she has to inject insulin for any food with over 10g of carbs. As a nine year old, she likes to avoid any unnecessary injections, understandably!”

“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, something I never dreamed I’d be able to do. Having this money has enabled me 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! Money is something everyone worries about but with the pay-out, it’s been one less thing to worry about throughout all of this.”

Please don’t wait

Getting the right cover in place at the right time could be the difference between your family struggling financially or being able to stay afloat, if the worst happened.

No one knows what’s around the corner and the price of life insurance becomes more expensive, the older you get. By getting a critical illness policy when you’re younger, you can secure a much cheaper premium, as your health tends to be better the younger you are.

If you’re still questioning why you need a life insurance policy, then ask yourself, would your family be able to get by if the worst happened to you tomorrow (touch wood)? If the answer is no, we urge you to start your free quote today, click the button below to get started today.