Can Critical Illness Cover Be A Lifeline?
Summarys
It is essential to clarify the wording of policies, especially those relating to critical illness cover. The innovative introduction of placing illnesses into types, which will provide customers a much better choice of life insurance.
Not many of us are covered against severe illnesses even though it may be fall us without warning. Legal and General, the income protection provider, has carried out research that say that only 5.2% of the Britons work force possess critical illness cover, even though they will receive a large sum if they have cancer, a heart attack or suffer a stroke.
17% of the population believe the cover to be too expensive, the survey reveals, which give reasons for the low take up.
Would-be customers are also confused by the wording of policies and the disparity between permanent health cover and life assurance.
A working party put together by the Association of British Insurers, is at this time re-examining the wording of policies. The situation could turn out to be even more perplexing if the working party choose to reduce the amount of diseases defined as a critical illness.
Standard Life have introduced a new product named Elixia 123, which it declares reduces the cost of critical illness insurance by about 26 per cent and sometimes by upto 49 per cent.
This will be accomplished by allowing customers to pick the illnesses for which they require insurance. There are 3 categories of risk. Category one. Strokes, invasive cancer and heart attacks. The plan will only make a settlement if the illness is life threatening or leads to major life style changes.
Category two. illnesses that do not have so much impact on life expectancy but do significantly affect life style. Alzheimer’s, blindness and Motor neurone disease are incorporated in this category.
Group three. Illnesses that are traumatic but have slight effect on life anticipation. Life style adjustments may perhaps be involved. This group protects minor heart attacks and strokes, less serious types of cancer and open heart surgery.
You can pick a blend of categories and your premium is calculated accordingly. If you can not meet the expense of all of the groups you could just choose category 1 to insure you for life threatening events. You would then receive a total pay out if you are diagnosed with a category 1 event and nothing in groups two and three.
Maybe you are more worried about long termdisability, in which case you might decide on a full settlement under category 2 and a lower percentage for one and three. Clients Consumers who want comprehensive insurance may select the full 100 per cent benefit no matter which category their condition appears.
Most people may not know Critical illness insurance is not that pricey so it is wise to opt for a comprehensive policy, which will give you security.
Jennifer Green, the distribution development manager at AXA PPP life cover, is concerned about how the jargon is explained. She emphasises that consumers must understand accurately what they are purchasing. Such as, when is a condition defined as major? The 1st and the 3rd categories need elaboration before buying insurance as there is not much to choose between them in her view. Difficulties can occur later if the customer has not fully understood the terms of the policy when they Susan Pilks.