To avoid any disappointment in the event of a claim against your Critical Illness cover, here’s our checklist of what to watch out for:
Cheapest isn’t always best
Don’t just opt for the cheapest policy you can find. Levels of cover vary widely, so you’ll need to make sure that you’re getting value for money.
Find out what you are covered for
Although critical illness policies cover the conditions many of us worry about – such as cancer, heart attack, kidney failure and multiple sclerosis – most also cover a wide range of additional illnesses, so always check exactly what is and isn’t included.
Want to add permanent total disability cover?
Critical illness policies may cover the policyholder becoming permanently disabled as a result of injury or illness as standard – or for an additional fee. If you choose this option, some policies pay out if you can’t do your own job, while others may only pay out if you are unable to work at all.
Check when the policy will pay out
For a claim to be eligible, you will normally have to survive for a certain period of time after you are diagnosed with a serious illness, and this will vary depending on the policy. If you have opted to add permanent disability cover and make a claim, the length of time it will take for this to be settled will depend on your individual condition, so always check the policy wording carefully.
Guaranteed or reviewable premiums?
Think carefully about whether you want to opt for guaranteed or reviewable premiums. If you choose guaranteed premiums, costs will be fixed for the term of the policy. If you go for reviewable cover, premiums will rise over time.
Guaranteed premiums give peace of mind, so you know exactly what you will pay each month, although they may be higher than reviewable premiums at the beginning. Reviewable premiums are likely to cost less initially, which is useful if you want to keep premiums to a minimum, but there is the risk the cover could end up costing more than you budgeted for later on.
Always tell the truth
The premiums you pay for critical illness insurance will depend on things like the level of cover required, how long you need the cover to last, how old you are, your health, what your occupation is and whether or not you smoke. Always be truthful in your application; otherwise, the insurers are likely to reject any claims you make. For example, don’t say you are a non-smoker if you smoke – it may reduce the cost of premiums, but it means your policy will be invalidated if you need to claim. You should also disclose a family history of any serious illnesses, as the insurer will take this into account when writing your policy and calculating what premiums you will have to pay.