Critical Illness Mortgage Cover

Critical illness cover typically provides financial protection in the form of a lump sum payment if you are diagnosed with a serious medical condition that is covered by the policy. The specific illnesses covered can vary depending on the insurance provider and policy terms, but common critical illnesses typically include:

• Cancer (excluding certain types and stages)
• Heart attack
• Stroke
• Organ transplant
• Kidney failure
• Multiple sclerosis
• Major organ failure
• Coronary artery bypass surgery
• Paralysis
• Blindness
• Deafness
• Alzheimer’s disease
• Parkinson’s disease
• Aorta graft surgery
• Motor neuron disease (ALS)

These are just examples, and the coverage provided by each policy can differ. It’s essential to review the policy documents carefully to understand which illnesses are covered and any specific conditions or exclusions that apply. Additionally, some policies may offer optional riders or enhancements to cover additional conditions or provide additional benefits.

• If you don’t receive any benefits that would cover you for long-term sickness from your employer.
• If you don’t have enough savings to pay for your care or your living expenses if you become ill and can’t work.
• Depending on your financial circumstances, you may be able to claim statement benefits of around £100 per week- if that isn’t enough the cover will help.
• If you’re single and don’t have any dependents, the critical illness will give you a one-off payment as opposed to a payment they’ll need in lieu of your income.

The cost of premiums for a critical illness policy will vary according to your age and health, i.e. the level of risk you represent to your insurer, so it’s important that you talk to an independent financial adviser who’ll have access to multiple products from trusted insurers across the entire market.

In some cases, critical illness cover may include exclusions based on medical conditions disclosed during the application process.

For instance, a particular form of cancer might be excluded if there’s a family history of the disease. This means that if you are diagnosed with this specific condition, your policy may not provide a payout for it.

The duration of critical illness cover can vary depending on the specific policy and terms you choose.

Typically, critical illness cover can last for a specified term, such as 10, 20, or 30 years, similar to term life insurance policies. During this term, if you are diagnosed with a covered critical illness and meet the policy’s criteria, you can make a claim to receive the lump sum pay out.

Alternatively, some policies may offer lifelong coverage, meaning they remain in effect for your entire life as long as you continue to pay premiums. These policies do not have a specified term and can provide coverage for critical illnesses at any age.

It’s essential to carefully review the terms and conditions of any critical illness policy you’re considering to understand the duration of coverage and any limitations, exclusions, or renewal options available. If you have specific questions about the duration of critical illness cover, speak to a member of the Mortgage Decisions team for peace of mind.

Joint critical illness cover is an insurance policy that covers two individuals, typically a couple, under a single policy. With joint critical illness cover, both individuals are protected against the financial impact of a critical illness diagnosis. If one person covered by the policy is diagnosed with a critical illness that is covered by the policy, a lump sum payment is made to help alleviate financial strain.

Joint critical illness cover can provide peace of mind for couples, ensuring they are financially protected in the event of a serious illness. However, it’s important to carefully review the policy terms, coverage limits, and exclusions before purchasing to ensure that they meet your specific needs.

It is common for critical illness policies to have exclusions for pre-existing conditions. If you have had a particular illness in the past, especially if it’s considered a chronic or recurring condition, the insurance provider may exclude coverage for that specific condition from your policy.

These exclusions are typically outlined in the policy documents, and it is essential to review them carefully to understand which conditions are covered and which are excluded.

While pre-existing condition exclusions can be frustrating, they help insurance companies manage risk and keep premiums affordable for policyholders. If you have concerns about specific exclusions or need clarification on any aspect of your policy, speak to a member of the Mortgage Decisions team.

Critical illness and income protection insurance are often confused, as they both serve the purpose of paying out if you are unable to work.

However, the two are not the same.

Critical illness pays out a one-off tax-free payment if you are diagnosed with a life-threatening illness and unable to work.

Whereas, income protection insurance provides regular payments, equivalent to a percentage of your salary, to help with the loss of income whilst you are out of work.

Income protection tends to pay out for a wider range of causes, including critical illness, minor illness, accidents and stress.

Critical illness, on the other hand, only pays out on a life-changing illness but does not require you to be off work in order to make a claim.

Typically, income protection insurance is significantly more expensive than critical illness, is a far more complicated product and cover can differ dramatically between insurers.

It is a common misconception that the terms critical illness and terminal illness are interchangeable.

This is not the case.

Terminal illness cover tends to be included as standard with term life insurance. It provides the option to make an early claim if you are diagnosed with an illness and given less than 12 months to live.

On the other hand, critical illness cover comes at an additional cost (either with your life insurance or as a standalone policy).

It provides a tax-free lump sum payout if you are diagnosed with a serious yet non-life-threatening illness.