Critical Illness Cover
What it is. Why you need it and if you have to have it!
What is Critical Illness Cover For?
Critical Illness Cover (CIC) insurance provides a lump sum payment to your dependents if you are diagnosed with a critical illness.
The kinds of illnesses that are covered are usually long-term and very serious conditions such as a heart condition, loss of arms or legs, or diseases like cancer, multiple sclerosis or Parkinson’s.
There may also/alternatively be the option of a monthly payment.
What does it Cover?
It is important to ensure that you explore the types of illness that will be covered to make sure that your policy is right for you.
You should also fully disclose any illnesses, conditions and medical treatment that you have already undergone when you make your application.
What will I get?
A claim on the policy will be made when the diagnosis is made.
The aim of this type of insurance is to provide financial support to you and your dependents.
The lump sum payment (depending on the level of cover you have opted for) is made with the aim of paying off some or all of the mortgage and therefore removing a significant bill from you and your dependents’ financial outgoings.
You may however choose to use the money for other purposes.
Joint or Sole?
Critical Illness Cover policies can be taken out for a single person, or as a joint insurance policy for two people. if it is a joint policy it will only pay out on the first event. Often these policies are taken out to cover the balance of the mortgage, on the same basis as a life policy. (More info here)
Where a single life insurance policy is taken out, because a CIC policy also acts as a life policy, you should consider placing the policy into trust for the person you intend to receive the money. This person is known as the beneficiary.
🤔 Do I have to have it?
No. The only insurance that is a condition of your mortgage contract is Buildings insurance. BUT if you get a serious illness and can’t pay your mortgage because your sick pay has run out, then your home will be repossessed, so if you have the budget available for it, it is advisable to have cover in place.
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