Wednesday 04 July 2018

Does critical illness cover include mental illness?

Author: Editorial Team

mental illness

When people take out critical illness cover, they often have certain diseases and conditions in mind. Many fear they will develop cancer, heart disease, or a debilitating condition like MS that will prevent them from going to work, impacting their finances.

Few people consider the financial implications of developing mental health problems. Often just as debilitating as any physical disease, mental illness can seriously affect a person’s earning capacity, putting sufferers in severe financial difficulties. So, does critical illness cover include mental health conditions? And is this form of insurance right for you?

What is critical illness cover?

Critical illness cover is a type of long-term insurance policy that pays out if you develop one of the illnesses or conditions named in the policy. As @YourMoneyAdvice says:

“If you get one of these illnesses, a critical illness policy will pay out a tax-free, one-off payment. This can help pay for your mortgage, rent, debts, or alterations to your home, such as wheelchair access, should you need it.”

It’s important to remember that only a limited number of conditions will be named in the policy. If you develop a type of illness not included in the list, your insurance won’t pay out.

Check your policy

In most cases, mental health conditions won’t be covered by a critical illness policy. You can talk to your financial advisor to find out if there are any insurers who will include a list of mental health conditions in their cover. Unfortunately, even if they do cover mental illness, it’s likely that only very specific conditions are included.

A lot of critical illness policies only pay out if you’re left with permanent disabilities as a result of your illness or accident. As mental illness is often considered manageable or even curable, it’s possible that sufferers won’t be eligible for a pay-out even if their condition was covered by the policy.

Alternatively you could consider an Income Protection policy.  This could provide a regular income in the event of any illness or injury that keeps you off work for a long time.  Whilst this is not a lump sum payment, it will certainly help to maintain the bills until you are able to earn money again and in most cases this will include mental health issues.

Pre-existing conditions

If you’re thinking about cover for mental illness because you’ve already experienced mental health problems, it’s important to remember that many insurers won’t cover you for pre-existing conditions. So, if you’ve had periods of mental illness in the past, this would probably disqualify you from cover in the future. Again, check with your insurer or your financial advisor before you sign on the dotted line to make sure you know exactly what’s included in your policy.

When taking out critical illness cover, always read your policy thoroughly and make sure you know exactly which conditions are covered. To find out more about taking out critical illness cover, or for more information on protecting your finances, get in touch with a member of our team today.

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Written by: Editorial Team