What is Critical Illness Insurance and why do you need it ?

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Critical illness cover (CIC) is a type of insurance which provides a significant one-off payment if you are diagnosed with a specified life-threatening condition - specified being the important term, because if your illness isnt in the terms and conditions - you wont get the payment. Over recent years, critical illness cover has gained in popularity due to lower costs and apparent simplicity.

Critical illness insurance can be sold as part of a mortgage package or additionally as a stand-alone policy. Critical illness cover can also be commonly associated with life insurance, with certain CIC policies paying out either on the diagnosis of a particular illness or on death, but not both, whilst other CIC policies pay out in both events.

When you first purchase the critical illness insurance policy, there might be an ( cheap life insurance ) option for buy-back insurance, this would permit you to buy additional critical illness cover or life insurance, typically at a minimal cost, after you have made a claim on your existing CIC policy.

life (Cheap Life Insurance)

It is often worth considering such an option, as the survival rates from a critical illness are usually very good and it can be extremely difficult to obtain new cover following a critical illness. Buy-back critical illness cover usually protects against the three major critical illnesses: heart attack, stroke and cancer from which you are most likely to recover, but also risk an attack later in life.

Bear in mind that when you take out life critical illness insurance, there is a standard waiting period between diagnosis and possible payout, from six months to a year for certain conditions, such as total permanent disability. However, if the diagnosis is very transparent, it is possible that the insurer would consider waiving the waiting period. The maximum payout ( secured loans ) varies from policy to policy thought its not unusual to see capped payouts of £500,000 or £1 million, though cover for higher amounts might be available on request. When the policy is sold as part of a mortgage package, the lump sum is designed to pay off the loan on the home, but with other policies, there may be no restrictions on how you use the money. Suggested uses may encompass covering living expenses whilst you are off work, though the money could additionally pay for private medical treatment, carer services, home improvements, career retraining, help for your dependents and even a holiday or break away. (Loans)

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