Critical Illness Insurance pays an lump sum if you are diagnosed with a serious illness or critical illness. The Life Company always provides a list of the illnesses that they define as “critical”. You will find this list within the key features you get with your application form. A typical list of such illnesses is shown further down.

After being diagnosed with a “Critical Illness” you may well survive for very many years. During that time your income may well be nil or only a tiny fraction of what it was before the illness. The financial effects on your family could be disastrous!

It may not happen to you and we sincerely hope that it doesn’t, but consider these facts: -

· 35% of men and 46% of women who develop cancer will survive for at least 5 years.

· 78% of stroke victims survive over a year.

· 1 in 5 men will suffer at least one critical illness before their normal retirement age.

· 1 in 6 women will suffer at least one critical illness before their normal retirement age.

Could you even hope to cope with the financial effects of such illness? Critical Illness Insurance is the easiest way to insure yourself against the financial consequences of such a event.

Please Note : Critical Illness Insurance is not the same as Terminal Illness insurance. Terminal Illness is free on most life insurance policies Critical Illness cover, however, can be quite expensive.

The main difference between Critical Illness and Terminal Illness is that Critical Illness will pay out immediately after you are diagnosed with a serious illness.* Terminal Illness Insurance will only pay out if you are expected to die within 12 months of diagnosis. (*The insurance company will also only pay out on a claim if the critical illness is included within your policy’s defined list of critical illnesses.)

Consider again the fact that 35% of men and 46% of women who develop cancer will survive for at least 5 years and that 78% of stroke victims will survive a year or more. We hope you will now appreciate the need for Critical Illness Insurance.

What illness is classified as Critical Illnesses?

Most Insurance Companies will offer you two different levels of Critical Illness cover; Standard Cover (also known as 'Basic Cover') and Comprehensive Critical Illness Cover.

Standard Critical Illness Cover covers most common illnesses from which the policyholder can be expected, eventually, to die.
Comprehensive Critical Illness Cover includes a much wider list of illnesses including several serious conditions that might not necessarily be terminal but would definitely prevent you from working.

The types of critical illness included within Comprehensive Critical Illness Insurance Policies do vary between Life Companies but typically they include the following: -

Alzheimer’s disease
Angioplasty
Aorta graft surgery
Aplastic anemia
Bacterial Meningitis
Benign brain tumour
Blindness
Cancer
Coma
Coronary artery by-pass surgery
Creutzfeldt-Jakob disease
Deafness
Dementia
Heart attack
Heart valve replacement or repair
HIV or AIDs (assault, blood transfusion, occupational duties or accident)
Keyhole heart surgery
Kidney failure
Loss of independent existence
Loss of limbs
Loss of speech
Major organ transplant
Motor Neurone disease
Multiple Sclerosis
Paralysis/Paraplegia
Parkinson’s disease
Stroke
Third degree burns
Total permanent disability
Children Cover

What does the “survival period” mean?

You should be aware that you are required to survive for a minimum number of days before you can claim under Critical Illness insurance policies. It is usually 28 days following diagnosis but some Life Companies have reduced this to 14 days. Please check your proposed policy. If you die within the survival period you cannot claim.

Employment Cover

When you buy Critical Illness Insurance you need to decide what form of “employment cover” you require. Before the Insurance Company will pay out, they will proof that the illness will prevent you from working. The issue is what form of work will the illness prevent you from undertaking?

To make things even more complicated, you could even come across four different definitions that define “out of work”: -

· Critical Illness that prevents you from continuing your current (or own) existing occupation.
· Critical Illness that prevents you from following any occupation at all.
· Critical Illness that prevents you from following any employment which suites you.
· A more common alternative is referred to as “Work Tasks and Life tasks”. The Life Company lists six “work tasks” (e.g. walking and talking) and six “life tasks” (E.g. washing and feeding). If you are unable to undertake any two tasks from the “work tasks” or any three from the “life tasks” your illness qualifies for a claim.