Table of Contents
Life is unpredictable at the best of times. We never quite know what’s around the corner, and sometimes that uncertainty can be unsettling. This is one reason people often decide to buy some form of insurance to protect themselves, their loved ones, or their belongings. Among the many types of policies out there, life insurance is one of the more popular options – it ensures your family or dependants receive a payout if you pass away during the term of the policy.
However, it doesn’t always include protection against serious medical conditions that you might face while still alive. That’s where critical illness cover comes into play. Although it’s significantly more expensive than regular life insurance, many argue that the added reassurance is worth every penny. But is that really the case, and if so, why?
What Exactly Is Critical Illness Cover?
Critical illness cover is an insurance policy that pays out if you’re diagnosed with a specific serious medical condition during the term of the policy. These conditions might include cancer, heart attacks, strokes, and certain other life-altering illnesses. The exact details and the number of conditions covered will depend on the policy, so it’s important to do your homework and check what’s on offer.
Unlike a standard life insurance policy, which only pays out on death, a critical illness policy pays out while you’re still alive. That can make a tremendous difference if you need to suddenly stop working to focus on your health. For instance, imagine discovering you’ve been diagnosed with a serious condition that requires prolonged treatment. Without critical illness cover, you might find yourself unable to work for months, or even years, and that in turn can lead to lost income, mounting bills, and huge financial stress. A successful claim on a critical illness policy, on the other hand, could deliver a lump sum that helps cover living expenses, medical bills, or even home modifications that you need to cope with changes to your daily routine.
Why Does It Cost More Than Regular Life Insurance?
It’s no secret that critical illness cover can be substantially pricier than a straightforward life insurance policy. The reasons are quite simple: your insurer is far more likely to pay out on a critical illness policy than on one that only covers death. Most of us, statistically speaking, are more likely to suffer a serious illness than to die prematurely during a set period. From the insurer’s perspective, that’s a bigger risk to shoulder, which naturally leads to higher premiums.
On top of that, medical treatments are continually evolving, helping more people survive serious conditions that would once have been fatal. This is wonderful news overall, but it means there’s a growing number of policyholders who live through their illness and go on to claim for that critical condition. Naturally, the higher the chance of a pay-out, the higher the cost of cover. While no one enjoys paying more for something, it’s important to see these higher premiums in context: if you do make a claim, the payout can be invaluable at a time when you need it most.
The Value of Covering All the Risks
Buying life insurance but ignoring the possibility of a serious illness is a bit like gambling without hedging your bets. You’re still spending your money, but you’re not covering all the risks that might come your way. That’s why you should always cover all the options when you’re playing at sister casinos rather than betting blindly and hoping for the best, and yet lots of people do exactly that with their insurance cover. Think of someone who purchases life insurance to protect their family if the worst should happen, but they fall seriously ill and can’t work. Unless they have critical illness cover, they may still be faced with financial difficulties at a time when they should be focusing on rest and recovery.
Consider a real-life scenario where a previously healthy, working person is diagnosed with a serious heart condition at age 40. They have two children, a mortgage, and they rely heavily on their monthly salary. If this individual had only bought a standard life insurance policy, they might find themselves in a position where they can’t work, need ongoing treatment, and must deal with various living costs. Although there might be a future pay-out for their family should they pass away, there’s no immediate financial support to get through this challenging period. By contrast, if that person had critical illness cover, they could receive a lump sum, allowing them to keep up with mortgage payments, pay for extra childcare, or even pay down some of their debts to reduce financial stress.
One of the main appeals of critical illness cover is that you can focus on your health and your family’s welfare instead of worrying about falling behind on your bills. Many people who have made a claim say that the policy gave them more control over their lives during a deeply difficult time. Knowing you have a financial buffer can alleviate some of the anxiety and mental strain that comes with facing a serious health crisis.
Making the Decision That’s Right for You
Every individual’s situation is different, so there’s no one-size-fits-all answer to whether critical illness cover is worth the cost for everyone. Some people might feel comfortable taking the risk with a simple life insurance policy. They might have enough savings to cope with a major illness, or they may have a partner or family network that can help with financial support. Others might feel that the higher premiums are just too much to absorb into their current budget.
However, it’s important to remember that a serious illness can be as financially devastating as an untimely death, especially if you’re the main earner in your household. The payout from a critical illness policy can help to protect your lifestyle and your loved ones’ future. Moreover, it can provide a sense of security that you simply don’t get with a standard life insurance policy.
If you decide to take out critical illness cover, try to read the small print carefully. Look at how many illnesses are covered, what kind of payout you can expect, and any exclusions that may be in place. You’ll also want to be aware of any specific criteria you need to meet before you can claim. In other words, know exactly what you’re paying for. If you can afford it, you might find it’s a price worth paying for that extra layer of reassurance.