Life insurance with critical illness cover - Life or earlier critical illness cover
Life and critical illness cover also known as life cover with critical illness cover is an insurance product that will provide financial protection if you were to suffer a critical illness. Basically, it could be looked at as entering a form of contract with an insurer whereby as long as you meet the monthly payments the insurer will pay out a tax free lump sum on diagnosis of a specified critical illness.
Today there are a number of different companies that offer life and critical illness insurance and life cover with critical illness and the schedule of insured illnesses varies between insurers. The first critical illness insurance was founded by Dr Marius Barnard in South Africa and was known as the dread disease insurance. Back then four conditions were covered by the policy these were; heart attack, cancer, stroke and coronary artery by-pass surgery. These today still make up the core conditions covered by the majority of insurance companies offering critical illness cover; however a lot more conditions have now been added. For example, the average contract will cover about 20 critical illnesses whereas a more comprehensive plan will cover up to 40 conditions. Examples of other conditions that may be covered include;
- Alzheimer's disease
- Blindness
- Kidney failure
- Major organ transplant
- Multiple Sclerosis
- Paralysis and/or loss of limb(s)
- Parkinson's
It is important to remember that the different insurance companies selling life and mortgage critical illness cover have their own defined list of conditions covered. Also, they will specify the circumstances under which they will pay out on one of their specified illness. The majority of insurance companies also have a stated survival period. This is a minimum number of days the policyholder is required to survive from when the illness was first diagnosed. In addition to this they will have rules and regulations under which they will state when a diagnosis is valid, by whom the diagnosis should be made, the evidence required for a valid claim etc. There will be a set of definitions for each condition covered by the particular insurance company. However, these are defined and regulated by the ABI. All this information will be contained in the policy documents and terms and conditions that will make up the life critical illness insurance contract.
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