People buy critical illness insurance to protect themselves against the chance that they will get a critical illness in the future. As medicine gets better, more people who are diagnosed with a critical illness are getting better. However, their finances may be stretched to the limit, and their lives may be harder than they need to be.
The insurance will pay out if you are diagnosed with one of the critical illnesses listed in the policy. The exact illnesses vary from policy to policy, but common ones include cancer, a stroke, a heart attack, or the need for an organ transplant. But when it comes to getting critical illness insurance, people sometimes get confused and end up with coverage that doesn't protect them well enough.
Some insurance companies charge very high premiums for policies that don't offer much protection and can have a lot of loopholes. This gives the customer very little value for their money. Most problems with policies come from the small print. Often, there isn't much information about them, so people buy coverage they don't understand.
When critical illness insurance is bought with the fine print in mind, it will pay out a lump sum that is not taxed if a critical illness is found. However, it was recently reported that around 25% of all claims made against a policy are rejected because of the exclusions. At a time when they need financial security and peace of mind that they will be able to keep paying their mortgage and other essential bills, many people find out they can't claim. This adds to their stress.
It seems like many insurance companies will say anything to get out of paying a claim, like the person didn't drink as much alcohol as they said they did on the form or didn't tell them about small problems before they were diagnosed. Before you buy the cover, you need to know exactly what you are getting. Also, you need to be careful when filling out the forms for the cover so that you tell them everything they need to know about your health.
Just like with payment protection cover, which is being looked into by the Financial Services Authority, the number of claims against companies that sold bad critical illness cover has gone up. Many of these claims were based on the fact that the provider didn't tell the customer about the policy's exclusions and fine print when they bought it.
Critical illness coverage can help you at a key time in your life, but only if you've read the policy's key facts and fine print and talked to a specialist broker who can give you the advice you need. The cover can be pushed along with the loan or mortgage, but this is the riskiest and most expensive way to buy the cover. A specialist broker can get you a good critical illness insurance policy while also gathering the most important facts so you can decide if a policy is right for you.
