Critical,Illness,Insurance,You finance, share, loan Critical Illness Insurance: Your policy should cover your ch


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Most critical illness insurance policies automatically insure your children but with a lower level of benefits than the main policyholders cover. But don’t under-estimate this cover as it is invaluable, especially if your child becomes critically ill and you need to take time off work to provide care. Critical illness insurance pays out a tax free capital sum if the policyholder, or one of their children, suffers one of the very serious illnesses scheduled on their policy. The only rider is that the claimant must survive at least 28 days after the diagnosis. Nick Kirwan, Protection Marketing Director at Scottish Provident, one of the UK’s largest critical illness insurers, said that claims for children are now the fourth largest cause for a claim. “Work takes a back seat when your child becomes ill. You may need to cut your working hours or even stop working altogether,” Mr Kirwan said. If your critical illness policy does insure your children, then a payout from the policy gives you the financial flexibility to do just that. So how much will they pay out? Most insurers will pay a proportion of total insured value if a child becomes critically ill. For example, Norwich Union will pay out 50 per cent of the insured sum or £10,000 whichever is the lower – and this cover includes adopted children and step children. Standard Life and Legal & General will also pay up to 50 per cent with Standard setting the maximum payout at £25,000 and in L&G’s case; £15,000. However, cover does not start as soon as the child is born. While some policies cover starts up at 3 months, others wait as long as three years. Ideally, you want cover to start as early as possible. Another other point to understand is that if the main policyholder has a claim, then the policy pays out and terminates – they can’t claim more than once. But if there is a claim for a child, the policy does not terminate – the cover for the policyholders continues unaffected. And if you start or add to your family after you’ve started the policy there’s no need to inform the insurer as the cover automatically covers all your children. But not all insurers will insure your children. The Halifax, National Westminster and Nationwide Life will not include any cover for children. Therefore, if you have or intend to have a family, it is vital that you tell your adviser and then he or she will ensure your policy includes the necessary cover. And that brings us to the topic of professional advice. You can buy critical illness insurance online yourself, but honestly it isn’t worth the risk. In our experience over 50 per cent of DIY buyers don’t get it exactly right. There is little standardisation within critical illness insurance so you are unlikely to get your ideal policy if you buy on the price alone. It is one of those situations where a low price can turn out to be a costly mistake. In order to get the ideal policy your adviser needs to understand how much you can afford and what aspects of cover are most important to you. It’s then a matter of using experience and product knowledge to find the best options. If this sounds like a receipt of throwing your discounts down the drain, it isn’t. Very few high street brokers will give you any discount but shop online with one of the specialist critical illness brokers and you’ll get full service and a discount. How do you find them? Well actually, you don’t need to look any further. This web site works with a specialist critical illness broker called ClickLife. Why not get a quote now?

Critical,Illness,Insurance,You

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