Don’t Be Afraid Of Death – Be Afraid Of What Happens If You Survive
When someone is diagnosed with a critical illness the last thing they are afraid of is what happens if they survive. The truth is, however, that most people have some form of life protection whether through death in service at work or policies taken out with mortgages but very few have protection if they survive their life changing illness but are unable to go back to work soon enough to save their possessions and livelihood.
Think about a situation where the main breadwinner is diagnosed with an extremely severe form of cancer and will be in treatment for most of three years and has a high likelihood of death. During that time they become extremely poorly, exhaust their sick pay entitlement at work, deplete their savings resulting in their family losing their home. Luckily they survive but require another year of rest and treatment to fully return to work and in the mean time they live with their family of five in a small run down bedsit. If the breadwinner had died their life protection of quarter of a million would have paid out and their family would have been safe from losing their home. Because they survived the family is destitute and face years of struggling to get back on track. This is the kind of message that governments are trying to get across, through viral seeding techniques like the ones below.
How Critical Illness Cover Works
Critical Illness provides an additional layer of protection to your life cover arrangements. It will pay out if the insured person develops one of the life threatening (critical) illnesses on the list specified by the policy. Over time these lists have become more specific and it is now easy for consumers to tell exactly what conditions are covered. The basic minimum standards are specified by the Association of British Insurers. If you see a policy advertising it is an ABI+ policy this simply means that in addition to the required minimum list of conditions they also cover you for either more conditions or more generous interpretations of the rules. In general if you develop a severe form of cancer you will almost always be covered, if you develop a minor form that has very high survival rates (some forms of skin cancer for example) this is often not covered.
What Can The Payout Be Used For?
Critical illness cover offers a great deal of peace of mind to both the applicant and their family, often at a time of great stress. Funds are freed up quickly to allow for expensive treatment not covered on the NHS, post treatment care while unable to return to work, repayment of the mortgage to reduce financial stress or provide essential modifications to the home if the applicant requires specialist care at home.
Many policies automatically include cover for children (ask your financial adviser for more information) which will pay out if they became critically ill. Many parents overlook the implications of losing their income while they are forced out of work to care for a critically ill child and nurture them back to health. As you can see these financial burdens can be onerous and a well thought out protection plan can significantly improve the quality of life of the applicant as they fight to survive and their family can continue without fear of losing their home as well as their loved one.
Important Features To Look Out For In The KeyFacts Document
Anyone considering taking out a protection plan for themselves and their family would be well advised to see a Financial Adviser. The plans are often complicated and shopping around on price alone could prove a grave mistake if you find that insufficient cover has been provided for.
Having said that, understanding the policies will help you make an informed choice as to which features you require. As we already discussed one of the core elements of the policy will be the definitions of illnesses covered. You should review these carefully and consider an ABI+ policy if the price is close as the extra conditions and more generous terms can often be well worth a small increase in premium.
Extra benefits such as protection for your children and Total Permanent Disability cover should also be considered. TPD is a topic for another article but as a brief explanation it will protect you if you don’t develop a critical illness but you develop a condition that results in you permanently being unable to work due to disability. Again there is a significant variation between the terms of policies and the types of work they test your ability to return to so you should take care to fully understand this before making a decision.
If Critical Illness Is So Important – Why Do So Few People Have Cover?
There are a number of reasons people will cite ranging from cost to just not knowing enough about the risks and options that are available to them. Human beings are also natural optimists and are more worried about how rich they’ll be at eighty years old than what happens if they don’t make it that far into the future.
Life companies have started to realise that old fashioned techniques are not working to inform the public about the importance of protection and have turned to more modern techniques such as YouTube videos and aggressive TV advertising during Prime Time TV shows. A great example is the Aviva advertisement shown below.
How To Find Out More
Contact your local financial adviser or visit the government Money Advice Service for more information. Remember it’s not just what happens if you die that matters, it’s what happens to you and your family if you survive.