Critical illness Cover and Life Insurance are two of the hottest topics in the UK right now. More Than Money answer the most frequently asked questions. Life Insurance is undoubtedly the simplest form of insurance to financially protect both yourself and your family, and it is the bread and butter of our advice.
This is why we always take the time to listen to you and find out exactly what you want or need, before going away and searching every UK insurer, to ensure that we recommend the most suitable Life Insurance cover to suit you. Often this will include some form of Critical Illness Cover as well.
And the difference between the two?
Well, the best way to tell the difference is to remember that Life Insurance is for the loved ones you leave behind, and Critical Illness Cover is for you, to make sure that YOU can still pay the bills and support your family if you’ve fallen critically ill.
Once you’re happy with everything and the quote ticks all your boxes we can take you through the application stage, which includes a health and lifestyle questionnaire, in order to set your policy up. This part of the process also includes us dealing with any questions you may still have, making sure the forms are completed correctly and setting up the direct debit for your monthly premiums on your preferred date.
Then we’ll walk you through any forms that need signing and make sure that all your relevant documents are sent out.
Life and Critical Illness Insurance
In a word, no. Life Insurance pays out a one-off, tax-free lump sum if you were to die during the term of your policy. Normally your surviving family would use this to pay off the mortgage, cover any bills or debts, and cover funeral costs. You may also want to insure yourself for enough that you can continue to contribute towards future expenses in your childrens’ future, such as making sure there’s money towards university costs, or a wedding for example.
Critical Illness Cover pays out if you were to be diagnosed with a serious illness, disability or medical condition. You could then use that money to support yourself financially or to adapt your home to your needs.
A good way to look at it is that a pay out from Life Insurance benefits them, a pay out from a Critical Illness claim benefits you.
There’s no hard and fast answer to this question, as it depends on so many factors; your age when you take out the policy, your current health and medical history, and how long you want the policy for, to name but a few. There are several different types of policy, including joint policies with a partner, Term insurance, and Whole of Life Insurance.
Your best bet when it comes to finding a policy that’s going to be most beneficial to both your lifestyle and your wallet is to come and speak to us and let us do the searching for you!
If you are single and have no dependents, you might question why you need to bother with a Life Insurance policy - and the short answer is, you don’t. Life Insurance only pays out once you are gone, so if there’s no one you want to leave money to, then there’s no need to have a policy.
However, if you have children and a partner, or anyone who relies on your income, who would struggle to keep up with the mortgage, bills and other expenses without you, then getting Life Insurance is a cheap way to solve that problem.
Yes, I would say that Critical Illness cover is most definitely worth having. If you were to become seriously ill and couldn’t work, how would you pay the bills and support yourself? And what about if you have a family? - Some financial support if you suddenly couldn’t work because of a critical illness would certainly take a load off your mind, wouldn’t it? Especially if you are the main breadwinner.
The list varies from provider to provider, with a lot of insurance companies now including more than 60 different conditions. As with all insurance policies, it’s really important to read the small print carefully to make sure you understand exactly what protection you have - I can help with that!
As a general rule, I would recommend that you want to cover roughly 10 times the main breadwinner’s income so that you can cover the mortgage and other debts as well as funeral costs and day-to-day living.
Ten times your annual income may seem excessive, but don’t forget that with the rate of inflation the value of that payout will be worthless in the future than it is now.
These are some of the most common questions asked about Life Insurance and Critical Illness cover, but it’s certainly not an exhaustive list! If you have any questions about Life Insurance or Critical Illness Cover, or you would like us to find the best policy for you, drop us a line and we’ll be happy to help.
If you have more questions or would like to make an enquiry about Life and Critical Illness Insurance, then pick up the phone and say hi.