According to recent research from Employeebenefits.co.uk, just 18% of employees have some form of critical illness or income protection cover. Important contingencies that would help you cope financially in case of serious illness, these protection plans can make a huge difference if you experience health problems that prevent you from working.
Despite the fact that less than a fifth of employees are covered by plans that would help them in the case of serious illness, the study showed the vast majority of families would struggle financially if they were affected by a critical illness. According to Employee Benefits:
“72% of respondents would struggle to cope financially if their income dropped by £570 a month, the average loss of income experienced by 80% of families following a cancer diagnosis.”
What is critical illness cover?
Critical illness cover is a type of long term insurance policy that pays out a one-off lump sum if you’re diagnosed with one of the conditions named in the policy. This money can then be used to help you cope with your condition, giving you the financial resources you need to pay your rent, your mortgage or make alterations to your home to help it meet your changing needs.
The conditions named in most critical illness policies are serious and often life threatening or life altering. Most policies will cover strokes, heart attacks, a number of different cancers, chronic conditions, like multiple sclerosis and permanent disability. If you make a claim on your critical illness cover, the policy will pay out once and then end. You can’t make multiple claims on the same policy although there are other types of plans that may allow this.
Do you need critical illness cover?
If you’re one of the estimated 72% of people who would struggle to pay their utility bills if their income fell by £570 a month, or one of the 80% of single parents who would find it difficult to support their families if they were diagnosed with a serious condition, critical illness cover may well be for you. What’s more, 22% of those who responded to the survey said they’d worry about becoming a financial burden on their families, something that critical illness cover can help to prevent.
Most policies now cover 40-50 medical conditions, so if you’re diagnosed with a life threatening disease, there’s a good chance you’ll qualify for a pay out. In general, critical illness cover is added on to life insurance policies. However, it can be possible to take out a policy in its own right.
Despite the fact that critical illness cover can ease financial worries just when employees need it the most, a surprising number of people are still reluctant to take out a policy. If you want to find out more about critical illness cover, or arrange a protection plan for yourself, contact one of our expert advisors today.
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Written by: Andrew Page