So you already pay health insurance, life insurance, home insurance, car insurance and travel insurance, do you really need to spend more of your hard-earned cash on yet another type of insurance such as critical illness insurance?
I get why many people think that critical illness is one kind of insurance cover that they can live without, but I’ve also seen the devastating consequences when things go wrong and people don’t have it. Personally, I like the peace of mind it brings and am willing to pay the – relatively low – cost to have that peace of mind.
Whether or not to take out critical illness insurance is a decision that each of us needs to make in the context of our global financial planning and you can only do that by weighing up the pros and cons. With that in mind, this blog is intended to provide useful information to help you decide whether you should take out a critical illness policy.
If you have critical illness insurance cover, you will receive a cash lump sum if you suffer from any of the illnesses listed on your policy. The number of conditions covered can vary from anywhere between around 10 and 100 but usually there are around 40 different illnesses including ‘the big three’ i.e. the most common – cancer, heart attack and strokes – but also diseases such as organ failure, multiple sclerosis, Parkinson’s disease, motor neurone disease or permanent loss of sight or hearing.
If you do find yourself seriously ill you will probably be unable to work, at least temporarily, and a lump sum insurance payout can be a valuable lifeline to help keep your family afloat when you are unable to earn because you can be sure that the bills will continue to roll in! The cash can be used to pay off a mortgage, cover ongoing bills, including school fees, or to make any changes to your home if you have to cope with a disability. Whatever it is used for, a cash injection relieves the financial pressure which is often an inevitable consequence of serious illness.
The reason I choose to have critical illness insurance is that I don’t have a crystal ball to tell me how my future is going to pan out. I am in perfect health, and hope to be for many years to come, but I have also seen devastating illnesses strike young and healthy individuals just like me. With a wife and small child to support, I feel better knowing that I have financial provision in place whatever the future holds for me.
Here are some of the statistics which have influenced my decision, bearing in mind that the vast majority of critical illness payouts are for cancer, heart attack and stroke:
- The risk of many critical illnesses is rising throughout the world and this affects thousands of people of working age.
- 1 in 2 of us will get cancer in our lifetime and while over 60% of cancer cases are diagnosed in over 65s that still leaves 40% affecting those under the age of 65.
- Heart attacks are becoming more common in younger people. A recent study revealed that 30% of heart attack patients in the US are aged between 35 and 54.
- A third of strokes in the UK strike those aged between 20 and 64.
- There are over 42,000 people under 65 with dementia in the UK.
What is particularly striking with all these facts and figures is that diseases that we think of as the preserve of the elderly are increasingly affecting younger people, most of whom will be working and supporting families.
Knowing that if I am unfortunate enough to suffer from any of these illnesses I will have financial support to get me and my family back on my feet is well worth the monthly premium that I pay.
If you think it might be time to get your family covered, I can help find the right policy for you. Policies vary from one insurer to the next and each insurer will have different definitions and thresholds for how serious an illness has to be before a claim will be honoured so it is worth shopping around and reading the small print. Contact me for a chat about how to protect your family in the case of critical illness. The peace of mind it will give you really is priceless.