Throughout the years there have been multiple facts and figures published, highlighting the impact of smoking on your health. It’s no secret that your smoking status will significantly influence your chances of suffering from certain conditions, which is why critical illness cover (CIC) is so important.
Is CIC worth it?
Smoking can increase the risk of suffering from cancers, heart attacks, strokes, heart diseases and more. Critical Illness Cover is designed to pay a lump sum if you get a serious illness, injury or can’t work. Many CIC policies are partnered with life insurance, however you are able to get separate cover allowing you to decide how much cover you need and for how long.
Consider getting CIC if you and your family heavily depend on your income, you don’t have enough savings to cover you should you become seriously ill or disabled, or you don’t have an employee package to cover time off work. You may not need CIC if you have no financial commitments or have a partner who can cover living costs and commitments, should you become seriously ill.
How does it work?
You will typically be asked to complete a health questionnaire during the application process, alongside a review of your medical records. It’s essential to state all existing health conditions when you apply. These details will then be considered to determine how much you need to pay. Once active, you can make one claim if you’re diagnosed with a specific illness. This tax-free lump sum can be used for anything you like, whether you want to pay off the mortgage, cover lost income or health-related costs.
What should I watch out for?
There are scenarios where a policy won’t pay out at all. Most policies will exclude claims where an illness is a result of self-harm, alcohol and/or drug abuse or taking part in extreme sports. Time limits may also be in place, such as not being able to claim within the first 90 days or if you die within a month of being diagnosed with a critical illness.
If you want to know more or find the best deal, contact your adviser to take you through the details of the policies available and help you choose the right one.
If you’d like to discuss the options available to you, contact your adviser today.
Source: Mortgage Intelligence (Published August 2023)
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