Like life insurance, critical illness cover is designed to give you peace of mind that if you were to be diagnosed with a serious illness - for example cancer, heart attack or stroke - that you and your family do not suffer any financial difficulty. Meaning the only thing you have to worry about is getting better.
We understand that should you be told you have a serious illness, this would be an extremely difficult time for you and your family. The last thing you want to be worrying about is how you will pay the mortgage, the council tax, the electricity - in short all the bills that just do not stop. Critical illness cover is designed to relieve these stresses by giving you a lump sum of tax free cash if you are diagnosed with one of the specific medical conditions listed in the policy.
This could be used to clear the mortgage in full or in part, to cover monthly expenses, or towards treatment and healthcare if required. These plans have no cash value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Critical illness cover pays out a tax-free lump sum if you are diagnosed with one of the serious conditions listed in your policy. Common covered conditions include cancer, heart attack, stroke and multiple sclerosis. The payout can be used however you choose, whether that is to pay off your mortgage, fund private medical treatment, adapt your home or simply replace lost income while you focus on your recovery.
Statistics show that around one in two people in the UK will be diagnosed with cancer at some point in their lifetime. A serious illness diagnosis can have a significant impact on your ability to work and your overall financial position. Critical illness cover can ease that financial pressure at an already extremely difficult time, allowing you to concentrate on getting well without worrying about money.
At Alexander Southwell Mortgage Services, we compare critical illness cover from a wide panel of providers across the whole of the market. We advise on the right level of cover and whether a standalone or combined life and critical illness policy is the best fit for your needs. Our service is completely fee-free, and we advise clients in Southampton, Hampshire and throughout the UK.
Related protection advice:
Critical illness cover is often combined with life insurance for comprehensive financial protection. Find out more about life insurance, income protection insurance and buildings and contents insurance, or visit our main mortgage protection insurance page.
It is not compulsory to have critical illness insurance in place to get a mortgage, but it is highly advisable. Here is further information on the policies to consider. As with all insurance policies, conditions and exclusions will apply.
Policy Term
The term of the policy is specified at the outset of the policy starting. In simple terms, it means how long you are protecting yourself, for example 1 to 50 years. Often the term is decided by the following points:
Mortgage term: If your sole purpose is to protect the mortgage then usually the critical illness cover will coincide with your mortgage term. So, however many years you decide to do the mortgage over, the critical illness cover will coincide with this.
Dependents: Taking the policy to an age whereby the children are financially independent. For example, 18 once they have finished school or 23 after university. This ensures that if anything happened to you whilst the children are still relying on you, your family's lifestyle would not need to change during this difficult time.
Retirement age: Make sure that your financial commitments are covered should the worst happen by taking the policy to retirement age, when your income would otherwise be your pension.
Budget: The amount of cover you take out will impact the monthly premium. We will help you find the right level of cover to suit both your needs and your budget, comparing policies from across the whole of the market.
Deciding which critical illness cover type is suitable for you and your family can seem challenging, however we are here to help and guide you into making the right decision. Whether you simply want to protect the mortgage, help to maintain the same standard of living, or simply cover ongoing costs there are 3 options for you to choose from:
Good to know: Critical illness cover can be taken as a stand-alone policy or as a bolt-on to a life assurance plan. Taking both together can often be cost effective and means you are protected against both death and serious illness. Speak to our advisers to find the right combination for you.
Terminal Illness benefit: Included within the policies is terminal illness benefit. In the awful event that you are given less than 12 months to live you will receive the pay-out whilst you are still alive. This can be used to help you and your family during this extremely difficult time so that you have no financial worries or stress.
Accidental Death Benefit: We give you Accidental Death Benefit while we process your application, giving you some peace of mind that you are covered in case of accidental death.
Children's Critical Illness Cover: As a parent the worst imaginable thing would be to be told that your little one has been diagnosed with a critical illness. Under the vast majority of critical illness insurance policies, children's cover is included at no extra cost. The insurers will pay a lump sum of cash, usually a percentage of the cover you have, so that you can use this for anything you deem fit - whether that be for the best treatment, carers, or simply giving you time together as a family.
Fracture cover: Fracture cover pays you a lump sum if you suffer one of the specified fractures during any 12-month period. Most insurance companies will pay one successful claim each policy year.
