| As the average individual is five times more likely to have to claim on their Critical Illness cover than they are the life cover they take up with their mortgage, having the right policy is essential to give you peace of mind.
But making sure you have the level of cover that is going to suit you can be a challenge. Though Critical Illness is relatively cheap, whether you are under or over paying when the time comes to claim, you may find that you have simply been throwing money away.
Though many take out critical illness cover to protect their mortgage should they be unable to cover the cost themselves, there are many more elements that should be taken into consideration to ensure your cover is adequate.
1. Cost of Premiums
As with any insurance policy, the first consideration has to be affordability. Though you may want to take out a policy which will pay you your full salary should you suffer from a recognized serious illness, the premiums for such protection may simply be unaffordable.
Sit down and look at the income you have left once all your regular bills are paid and work out exactly how much you have remaining that could be allocated to a critical illness policy. The maximum value of your cover will then be dictated by the policy you can afford.
2. Protecting Your Mortgage
When taking out critical illness to solely cover your mortgage or other long term debt then consider the type of debt you have.
If you have a repayment mortgage or are repaying your debt off on a regular basis then the value of the sum owed will reduce over time. Therefore your critical illness can also reduce on the same sliding scale over the duration of the repayments.
However if you are only paying off the interest on a mortgage or other money you owe, then the value of your cover must remain the same throughout the life of the debt to keep you fully protected.
3. Other Cost Considerations
But even if you do not have a mortgage or your provision covers the full outstanding amount, there are still other areas where further protection is essential.
In general terms most people will take out cover of approximately three times their annual salary for a lump sum payment should the worst happen.
This will cover any time you have to take off work for treatment, as well as alterations you may need to make to your home or lifestyle and will even contribute to your medical expenses and palliative care.
But the best way to ensure that you are getting the level of critical illness that you require is to seek professional advice from an independent insurance broker. He will be able to calculate a level of cover that will suit your needs and ensure that you are not over or under insured, giving you the support you need to prepare for all of life’s little adventures. |
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