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"Do You Need Critical Illness Coverage"

Posted April 4th, 2016 by Rob Anderson

Critical illness coverage, also known as critical illness insurance, is a long-term insurance policy to cover specific serious illnesses listed within a policy. Should the worst happen, it gives you a tax-free ‘lump sum’ – a one-off payment, to help pay for your mortgage or rent, debts, or pay for alterations to your home such as wheelchair access should you need it, but it’s your choice how you spend it.

Critical illness insurance will pay out if you get one of the specific medical conditions or injuries listed in the policy. But be aware that not all conditions are covered and policy will also state how serious the condition must be.

Every year 1 million workers unexpectedly find themselves unable to work because of injury or illness. Critical Illness insurance covers heart attack, cancer, stroke and kidney failure. Most policies will also consider permanent disabilities as a result of injury or illness. Some policies will make a smaller payment for less severe conditions, or if one of your children has one of the specified conditions. Some serious illnesses might not be covered, for example, some cancers and conditions not listed in the policy. You probably won’t be covered for health problems you knew you had before you took out the insurance, and this type of insurance does not pay out if you die. What’s covered and what’s not, will be set out in the policy details so make sure you’re fully aware of them and that they cover your needs.

State benefits might not be enough to replace your income if something goes wrong. If you’re eligible, welfare benefits begin at around $150 a week, depending on your circumstances (i.e. whether or not you have children, a certain level of savings, or if your partner works).

Critical illness coverage could be considered if:

you don’t have savings to tide you over if become seriously ill or disabled
you don’t have an employee benefits package to cover a longer time off work due to sickness

Your monthly payments will depend on a number of factors, including:

age
whether you smoke or have previously smoked
health (your current health, your weight, your family medical history)
job (some occupations carry a higher risk than others and may mean you have to pay more each month)
the amount of cover you take out

You might not need it if:

you have enough savings to fall back on and can adequately cover expenses such as bills, loans, medical costs or a mortgage
you have a partner who can cover living costs and any shared commitments, like a mortgage

You might already have some coverage included in other products or work benefits.

Have you thought about how your dependents might cope financially if you died unexpectedly? Or what you would do if you fell ill and found yourself unable to work?

There are a number of insurance products which can provide you with peace of mind should something go wrong. You can find out more in the links below.

Do you need life insurance? This product will provide some financial support to your dependants if you die.

Do you need income protection insurance? This type of insurance provides regular payments if you are unable to work due to illness or injury.

Do you need payment protection insurance? This product will help you keep making payments if you can’t work due to an illness, injury or if you’re made redundant.

Do you need short term income protection? This solution provides short term coverage to help you pay for essential outgoings if you find yourself unable to work.

Share this article and always if you have further questions please contact your agent.

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