Critical Illness Cover

Critical Illness Cover

Critical Illness Cover is a policy which is designed to pay out a lump sum on the diagnosis of specified illnesses. It is often arranged in conjunction with a life insurance plan, but can be applied for as a standalone critical illness policy.

The lump sum required on a successful claim is decided by the policy holder when the plan is arranged and is often set up for a sum which is at least equal to the outstanding mortgage. The actual sum assured is usually determined by the individual’s budget and the lump sum payment is tax free.

In the event that a critical illness policy plan pays out, the plan owner will have complete discretion as to what they use the benefit lump sum for. Often these types of plans are arranged to pay off an outstanding debt such as a mortgage, therefore helping the individual or family by removing financial burden during a period of ill health. Alternatively this type of plan may be arranged with the purpose to pay for time off from work or even modifications to the home in the event of a critical illness.

The types of critical illness plans available in the market are different from provider to provider. It is therefore important to take advice to ensure that you have the right plan that provides you with the best value for your needs and circumstances.