You might be thinking about taking out a plan that will protect your family against losing your income should you die. At the same time, you could also be considering what would happen if you became seriously ill and you were unable to work. This area can become quite confusing very quickly so this article will explain what combined life and critical illness cover will provide you with.
Let's take each type of plan separately and see what they provide.
Life Insurance: This will simply provide a cash lump sum to your family should you die during the term of the policy. The simplest and most popular kind is called Term Assurance. This is usually the least expensive kind of arrangement, too. There is no investment element and you will not receive any money back if you cancel then scheme either during or at the end of its term.
Critical Illness: This pays out a cash lump sum should the policyholder be diagnosed with a seriously threatening ailment. The three most common claims are for Heart Attack, Stroke and Cancer. Each firm will describe which conditions it will pay out for in the plan's small print. However, you need to be very careful about what these schemes will pay out to you for. For instance, they will not give you an income if you are unable to work because you have had an accident and broken your leg. Nor will they pay out if you get a very bad back. You have to be confirmed as having one of the conditions specifically listed in the plan's terms and conditions.
A life and critical illness cover policy brings these two types of insurance together in one combined plan. It can be a good way to arrange the protection that you need. Both of these schemes are available separately, if you wish. They are a variety of different schemes but the most common arrangement is for a fixed amount of protection over a fixed time scale.
Taking out these sorts of arrangements can provide both you and your family with great peace of mind. The do not help you should you lose your salary because of redundancy or unemployment. That sort of scheme has increased in price a great deal recently. Indeed, some companies have not been allowing people to continue with their existing schemes. Claims can be very troublesome, as well.
Often, you will also need an Income Replacement Policy to provide you with an income should you be unable to make a living because you have a lesser debilitating problem. These pay out when you cannot work because you break your arm skiing or similar circumstances.
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