Are you covered for every scenario?

Most of us would agree that life cover is vital. It provides peace of mind and a financial lifeline for those we care about, if the worst was to happen to us.

Consider the financial impact if instead of an untimely death you faced a serious illness that made it impossible for you to work.

Logically, more people will face serious incapacitating illness than early death, but although it is possible to insure against it, many are unaware of the cover – and the important difference it could make to their lives.

At Continuum we are looking at serious illness cover – and why it might be a good idea to add it to your life insurance.

What is serious illness cover?

There are many illnesses that may not be immediately fatal but can nevertheless have a significant impact on your life. They can stop you from working and your recovery may require assistance and time. 

In some cases, you may never be able to work again – but the bills will still keep coming.

That’s where serious illness cover comes in.

Serious illness cover (also known as critical illness or specified illness cover) provides you with financial support if you are diagnosed with a serious illness. 

Serious Illness Cover (SIC) is a long-term insurance policy designed to pay a lump sum on the diagnosis of certain life-threatening or debilitating (but not necessarily fatal) conditions such as a heart attack, stroke, cancer, multiple sclerosis and loss of limbs. The actual list of conditions covered will be specified in the policy document along with any exclusions and limitations – these differ between insurers.

Serious illness cover policies usually only pay out once, so are not a direct replacement for income, but they may be able to provide sufficient funds to deal with immediate needs. Having financial support at a time of physical and emotional stress can ensure that you are able to take the time off work, pay for specialist treatment or even cover day-to-day household bills such as childcare. Serious illness cover can be purchased as an additional benefit to most life insurance policies.

Do you need it?

While most employers offer life insurance, not all provide any cover for serious or critical illness. If you have no dependents, serious illness cover can be used to pay for things such as household bills or medical expenses that are not covered under your health insurance. And if you have a family, how would they cope if you became ill and were unable to work?

State support does exist, but it is likely to be less than adequate for your needs.

Should you act now?

Like accidents, illness can strike without warning at any time. The older you are, the more likely it is that you will be a victim.

Serious illness becomes increasing likely as the years go by. But rather than wait until time is not on your side, you should probably act now. Remember that the cost of arranging serious illness cover rises dramatically as you get older.

You need to take a closer look at the policy before making a decision. Most will not offer blanket cover for any sickness that affects your ability to work. Your policy will be specific about which illnesses are covered.

Most will provide a list of the conditions covered and the criteria that have to be met before the insurer will pay a claim, including defining the level of severity of the illness. As an example, although cancer will be covered, not all types of cancer will merit a payout. For heart attacks, the insurer will need medical evidence of the severity of the condition before paying a claim. Some insurers exclude all pre-existing conditions but others will decide on the basis of your personal medical history.

Getting some help

It may be possible to simply add Serious illness cover to your existing life insurance – or it may be better to look at a standalone policy.

At Continuum we can look at the cover with you and help you find the policy that is right for you. We can also look at other types of protection insurance such as income protection, which rather than a lump sum would pay out a regular income until you were fit enough to work again

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Protection products, you should seek independent financial advice before embarking on any course of action.

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