When couples take out Critical Illness Cover they often opt for a single plan which is set up as 'joint life first claim.' This means that as soon as a claim is made the policy pays out and comes to an end.
Clearly this is good news if this policy had been taken out for mortgage protection purposes but what about the other partner? The other partner now has no cover. That partner could take out a new plan but they will have aged in the meantime and might not be able to get cover due to recent medical issues. What is almost certain is that the new premium will be higher.
When setting up Critical Illness Cover for joint applicants it is far better to set up two plans, one for each applicant covering the full sum assured. This does cost slightly more but in most cases only one or two pounds extra per month. This means that if a partner claims on their policy the plan pays out and comes to an end but the other partner still has their policy for further future protection.
It is even possible to improve this situation further by adding a buy-back option to both policies when initially setting them up. A buy-back option means that once the plan has paid out the policy holder has the option to purchase more critical illness cover (usually up to certain limits) irrespective of their state of health. This is valuable protection as it is quite possible that cover would not be offered by any other life assurance company for at least a year.
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