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When researching critical illness insurance policies there are several factors to consider when choosing which critical illness insurance is right for you. One factor is whether your policy will have decreasing critical illness coverage. This kind of critical illness insurance is similar to others in that you are covered for a set term and you generally receive a lump payment upon the diagnosis of a covered condition or if you die during the term of the policy, should you also have life insurance combined. The difference is that in a decreasing critical illness insurance policy the coverage amount decreases over the term while the premiums remain the same. These policies are generally meant to pay off a mortgage if the policy holder gets a critical illness. The decreasing critical illness cover coincides with the mortgage amount which would also be decreasing over time. Presumably, provided the mortgage hasn’t been changed, the lump sum will be enough to pay off the mortgage with perhaps a little left over for bills. If however, the policy holder has changed or refinanced their mortgage they may want to discuss this with their insurance advisor to see how it affects their policy.
Decreasing critical illness - Decreasing critical illness insurance - Decreasing critical illness cover
When consumers are choosing which critical illness cover to go for they choose decreasing critical illness coverage because it is more affordable than standard term insurance. Insurance companies charge less for these policies because their coverage is going down over the years, and the longer the policy holder goes before making a claim, the less they will receive. So it costs less than a policy where the payout remains the same throughout the term. Decreasing critical illness insurance can be a good option for those with stable mortgages who want to save money on insurance costs.
Consumers who decide to get decreasing critical illness cover should note that this is a term policy and there is no maturity value at the end of the term. If no claim is made, the policy is over and the coverage ends. Their insurance advisor should be able to answer their questions and also help them find a policy that is right for them and their families.
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