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Critical Illness cover - A brief overview!

16th Jan 2024
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For nearly two decades, Davenport Thomas’s highly experienced team has worked closely with numerous accountancy practices to support their clients with a wide range of financial planning needs.

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Critical illness cover is officially middle aged, having entered its fifth decade of existence last year. It was originally known as ‘dread disease insurance’! Perception of illness and our protection needs have clearly changed over the years, but we all want to do the best to protect our families. However, there are still too many people who haven’t considered how they and their family would cope if they became seriously ill. This is why we think you think you should consider critical illness cover.

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Critical illness explained

Critical illness cover typically pays out as a lump sum if you are diagnosed with a particular illness as defined within the terms of your cover. In 2018, the Association of British Insurers published its Guide to Minimum Standards for Critical Illness Cover and as a result, all critical illness policies now automatically cover cancer, heart attacks and strokes, providing they are of a certain severity.

In recent years, there has been a race to quality with providers offering multiple versions of policies, making it even more important to get advice in choosing the right one.

 

You can have a standalone policy or combine it with a life insurance policy.

 

Is it for me? Things to consider

A critical illness can affect anyone at any age. A sudden diagnosis of illness can change your life and the lives of your loved ones. Having a back-up plan in place provides crucial support in the hardest of times.

The tax-free payment could help fund your treatment, childcare costs or household bills, while allowing you to maintain your standard of living. It might also help towards making changes to your home should these be needed.

 

Will it pay out?

The most commonly held myth is that this cover won’t pay out. Here are the facts –in 2022, 91.6%* of critical illness claims were paid, according to the latest figures from the Association of British Insurers (ABI) and Group Risk Development. The majority of declined claims resulted from material non-disclosure i.e. not telling the insurer all the facts.

 

Here to advise

We have a wealth of experience when it comes to arranging protection for our clients. We can guide you through the possible options and ensure you have the right protection for your needs.

So, for a discussion about how we can help you and your clients, you can book directly into David’s diary here, email us or call us.

 

David's contact details are:

Calendly - David Fear

Tel number 02088192407

Email is [email protected].

 

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*ABI 2023

 

Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lap