Do I need critical illness insurance and what is it?
As part of your overall financial planning it may be of benefit to consider the option of critical illness insurance cover, what it entails, and whether it would be important with regards to your family and loved ones future financial peace of mind.
A lot of people are fully aware of life insurance and quite a few of them already are aware of the fact that they need some sort of life insurance as part of good financial planning. This is not least when they have a mortgage or a loan to insure. That said considerably fewer of them are aware of critical illness insurance let alone the important role it can actually play in good financial planning.
Critical illness is a completely unique form of insurance cover. It can be added to your existing policy as an extra or can be taken out independently as a form of insurance policy in its own right. Its specific purpose is to provide cover which will pay out the sum of money insured to the insurer should one of any number of critical illnesses deem them unable to work, such as cancer, heart attack, major organ transplant, stroke, and the list goes on.
What is important about this type of cover is that is that payout occurs when the condition arises, and is not reflective of the outcome of the situation. As an example, lets assume, God forbid, that you ended up having a heart attack. With the advancement of medical know how it is entirely possible that you would make a full recovery. But you would still be entitled to the payout because it is reliant on the contraction of the illness and not how you end up as a result of it.
So you can see just how beneficial this benefit can be, whether taken out as a separate policy or as an additional benefit to an existing one. But what type of policies can it be added to? Well it can run in conjunction with whole of life and level term insurance and, more importantly, mortgage protection.
This type of policy is most beneficial alongside mortgage protection or mortgage life insurance. If you had a mortgage and you died you would obviously want the coverage that would enable the mortgage to be paid off, but what if, instead of death, you contracted a major illness? That critical illness could mean that you were unable to work and so were without a source of income. This is where critical life insurance plays such an important role with regards to your finances. You are left to convalesce in the secure knowledge that your outgoings are being taken care of.
Over and above mortgage life insurance critical illness cover has a bit of a rich mans reputation. That's to say that people only take it out if they can really afford it and many find other things that require money be spent rather than critical illness cover. This is a shame as within your normal situation this type of cover is most valuable, once the loans are paid off additional money can be a huge benefit, maybe to adapt a home or even to take you on a world cruise, I probably don't need to teach you how to spend it but I am sure you get the picture.
So to summarise critical illness insurance is a most valuable benefit, some see it as more valuable than life cover as the benefit can be actually available before you die. That said at the very least mortgage and other loans should have the benefit of this type of cover and beyond that it is strongly recommended, but only you can truly decide whether or not you can afford it. But speak to your life insurance broker as they will be able to recommend the right product for you with the right level of cover and make sure you are adequately protected.
Article Source: http://www.search-raven.com
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