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Summary

The important facts you should consider when selecting critical illness cover and the varietyof companies tendering thiskind of policy.

Your mortgage lender may propose quite a few financial products together with critical illness cover. On the other hand, as they are not experts in this market, you will probably find a better offer somewhere else.

The level of cover on offer is just as significant as the premium when looking forcritical illness cover. The policies from Alliance and Leicester and Nationwide are very limited according to a Director at Direct Line, a telephone and online life assurance broker. Standard Life covers only eight critical illnesses, with Scottish Equitable covering just 9, whereas the market leader, Aviva, covers 38.

Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the illnesses not covered by some of the Insurance companies. The Directorsays that it is not worth consideringa policy, which insures less than 25 ailments.

An umbrella term incorporated in all policies is ‘total and permanent disabilities’, this term means you are covered for any condition, which stops you from working permanently.

You must be watchful of the lanuage as some plans cover ‘any occupation’ whereas others only cover your ‘own’ occupation. You will not receive a payout under a ‘any occupation’ policy unless you are totallyunable to carryout a job, however menial. Consequently The senior adviserrecommends you sign up for a ‘own’ occupation policy.

There are a range of companies as well as Aviva who offer comprehensive insurance including Scottish Provident, Scandia, Zurich life, Friends Provident, Scottish Equitable, Liverpool Victoria, Norwich Union, Legal and General and Zurich Life.

For many years life cover  has been promoted by mortgage lenders. This has resulted in critical illness cover never being considered by many people. There are five times as many claims on critical illness policies compared to life policies, when the client has taken out both types of insurance.

Life insurance cover is very important, especially if you have dependents, as they will welcome the lump sum settlement on your death. On the other hand critical illness cover should be the priority if you have debts to settle, particularly a home owner loan. The Directorbelieves critical illness to be essential as it covers the cost of your house and food, even if you are sick and unable to work.

The premiums will be higher if you are a smoker or heavy drinker and will also rise if you are older. A decreasing term policy, which is aimed at people only wanting to cover the cost of their mortgage, is the cheapest.

One of Hamptons customers, a 28 year old non-smoker, who wanted£100,000 cover from a critical illness, long term policy, was quoted 14 pounds 40 pence per month, which rose to £25-50p for smokers. However an adviserfrom Money Supermarket suggested a policy, which gave both life insurance and critical illness cover for £17-80 a month, so it would be well worth paying a slightly higher premium.