Critical illness cover is an area of insurance that not enough people know about in enough detail. As a society, we’re getting better at understanding the need for life insurance, but we’re still well behind where we need to be when it comes to getting the right kind of cover for serious illnesses.
The difference between the two forms of cover is best explained by describing critical illness cover as a form of survivor’s insurance. Life insurance will only pay out its face value when the person covered by the policy is either dead or at the point of death. Critical illness or serious illness covers pays out for the things that will have a severe or permanent effect on your health or ability to work, but won’t actually kill you. Cancer, heart attacks, strokes, and brain injuries are all events that a good critical illness policy will cover. Other situations that might limit your ability to work, such as becoming blind or losing a limb or also covered.
Now that we’ve established what critical illness cover is there to do, it’s also important to acknowledge why most people don’t have it – it tends to be far more expensive than straightforward life insurance to own. There’s a good reason for that. If you consider the period of your life between now and the day you retire from work, it’s a lot more likely that you’ll get seriously ill and not die than it is that you’ll die. That means you’re much more likely to make a claim on such a policy, and so insurers charge more for providing them. That’s led to it becoming one of the least taken-up types of cover in the United Kingdom, which is bad news for those who get seriously ill without any form of protection.
Although critical and serious illness cover is more expensive than basic life insurance, there are certain things you can do to bring the cost down. From an insurer’s point of view, providing you with cover is a gamble, just like playing a UK online slots. They give you a price based on how likely you are to make a claim, and therefore how likely they are to end up with a profit and a loss. Just in the same way that online slots websites calculate the odds of their games to ensure they bring in more than they pay out in winnings, insurers calculate their prices to ensure they receive more in premiums than they pay out in claims. Getting a critical illness insurance payout isn’t as joyous an occasion as winning an online slots jackpot, but it’s still a welcome relief when you need the money the most. Here’s how you can give yourself the best chance of getting a good price for your cover.
It’s a sad fact of life that the older we get, the more likely we are to get ill. If you take out critical illness cover when you’re 40 years old and get sick when you’re 50, the insurer has only had ten years to collect premiums from you. You’ll, therefore, pay more than someone who took out a similar policy at the age of 20 and got sick at 50 because the insurer has had thirty years to collect premiums from that person. Don’t delay when you’re thinking of taking out cover for illnesses. If you don’t have any cover, the best time to get it sorted is right now.
It’s possible to be a little heavier than the ideal weight for your height and be perfectly healthy, but insurers work on statistics. Unfortunately for heavier people, those statistics say that overweight people are more likely to develop serious health conditions. Obese people are more at risk of heart attacks, strokes, heart disease, and type two diabetes. All of those conditions can limit life and impact the quality of life. That means if you’re carrying a little extra weight, you’ll pay more for your cover. Consult a BMI chart, find out what the optimum weight for your height is, and get as close to it as you possibly can. Even if getting all the way down to the ideal weight is a struggle, you’ll pay less the closer you get to it.
We shouldn’t even have to explain this one to you. Everybody knows smoking is bad for you. Everybody also knows that smoking contributes to several forms of cancer, including most notably lung cancer and mouth cancer. Smoking has been linked to a whole variety of illnesses and health complications and is bad for just about every vein and artery in your body. Statistically speaking, smokers live shorter lives than people who don’t smoke and are far more likely to become seriously ill at some point during that life. You shouldn’t just stop smoking for the good of your insurance prices – you should stop for the good of your health and your future! After you’ve stopped smoking for a full twelve months, the majority of insurers will be happy to offer you non-smoker rates. For the record, non-smokers often pay less than half the price that smokers pay for their cover.
Only Cover The Period You Need To Cover
This is a crucial mistake most people make. The later in life you choose to have your illness cover protect you for, the more it will cost. That’s because someone in their seventies is more likely to get seriously ill than someone in their sixties, someone in their sixties is more likely to get seriously ill than someone in their fifties, and so on. Critical or serious illness cover shouldn’t be there to protect you in old age – that’s what life insurance is for. When you’re at retirement age, your income should come from pensions. That income doesn’t stop if you get sick. You should only arrange for your critical illness cover to protect you for as long as you need it. For most people, that’s up to their anticipated retirement age, and no longer. For some people, it’s only for as long as they have a mortgage or a dependent child. Everyone’s circumstances are different, so choose a term that’s relevant to you and save money by not extending the term beyond it.
Critical illness insurance costs more than life insurance because you’re more likely to have it, but as the old saying goes, nothing worth having ever comes cheaply. Hopefully, by following the advice we’ve outlined above, you can get a great deal for your cover.