If you’ve started looking around for insurance policies that will protect you and your family in worst case scenarios, you’ll probably have realised there are a lot of options out there. Understanding those that are relevant to you and your situation can help you to select the right cover and ensure you’re financially protected if the worst happens.
As a landlord, you need to make sure your financial responsibilities are met if you fall ill and are unable to work. One of your options is to take out critical illness cover. But just what is critical illness cover and is it right for you?
What is critical illness cover?
Critical illness cover is a type of insurance that pays out a lump sum if you fall seriously ill. This money is generally tax free and can be used to pay for the care you need. You can also use it to fund specialist medical equipment and renovations to your property to make it easier to live in. If the illness is very serious and you pass away, the leftover money can be used by your family to cover any outstanding financial obligations you’ve left behind.
What does the insurance cover?
Contrary to what many people believe, critical illness cover doesn’t pay out for all serious illnesses. As @CitizensAdvice points out, “Critical illness insurance policies don’t cover every type of illness. And with the illnesses they do cover, you usually have to be extremely ill or totally disabled before you can claim.” Generally, insurers will have a specific list of illness that they will pay out for. This list can contain as few as ten conditions, though these days 50 to 70 is more common.
Should you take out critical illness cover as a landlord?
If you’re considering taking out critical illness cover, the main question you need to ask yourself is – “Could I cope financially if I were unable to work for a period of weeks, months, or even years?” – if the answer is ‘no’, an insurance policy that will help you and your family to manage could put your mind at ease.
Whilst it is true that any mortgages you have on your rental properties should still be covered by the rent being paid by the tenant, critical illness cover can be a good option for you, if you want a safety net in case the worst happens. If you do fall ill, you can use the lump sum to cover any unexpected expenses on your rental properties and to help pay off your mortgages. Before taking out the cover, it’s a good idea to check which illnesses are included in the policy – so you know exactly what you’re signing up for.
To learn more about insurance for landlords, or to find out about other policies available, explore our site or contact an expert member of our team.
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Written by: Andrew Page