Our guides
Sometimes, life sucks and it can feel like everything’s conspiring against you. You know the feeling — like when your secret chocolate stash is empty, or you get soggy cuffs while washing up or if your doctor’s just uttered the words “I’m sorry to have to tell you…”.
But while you can sort out a click and collect or remember to roll your sleeves up, finding out you’ve been fast-tracked to meet your maker is a curveball not quite so easy to dodge. Luckily, that’s where critical illness insurance comes in. And while it can’t make all the bad stuff go away, it can make life financially easier, here’s how it all works.
Critical illness insurance is a product that pretty much lives up to its name. It’s a type of insurance that pays out a chunk of money if you’re diagnosed with a condition covered in your policy. At DeadHappy we offer a very similar insurance called near death insurance. You can buy cover in one of three ways:
Additional cover alongside your life insurance policy
Combined cover as part of your life insurance policy
Joint cover for two people
Critical illness insurance is a product that pretty much lives up to its name. It’s a type of insurance that pays out a chunk of money if you’re diagnosed with a condition covered in your policy. At DeadHappy we offer a very similar insurance called near death insurance. You can buy cover in one of three ways:
The conditions covered by your insurer will be listed in your policy. It’ll read like the dictionary of doom, but it’s important to know what’s included because different policies cover different things. At DeadHappy, under our Near Death policy, we cover pretty much the worst things that could happen to you, for example:
Thanks to the marvels of medicine, not all cancers will kill you but we’ll compensate you for stage 2 cancer and beyond.
No insurance policy would be complete without a list of exclusions. These are all the things that you won’t be covered for and because insurers set their own rules, they can vary between policies.
In most cases you won’t be covered for pre-existing conditions, this is anything you already have or have been diagnosed with in the past. So, if you had a heart attack three years ago, you probably won’t receive a payout if you have another one.
With that in mind, it’s really a very good idea to read the terms and conditions in your policy. We know it’s dull and we know there’s a lot to read but knowing exactly what is and isn’t covered will save huge amounts of stress if you ever need to claim.
If we’re honest, that’s not something we can answer for you. We’re not passing the buck, but critical illness cover is much like any other safety net — unnecessary until it’s not.
After all, if you have it and don’t need it, you might be slightly annoyed but if you need it and don’t have it...well, then you’ll be really annoyed, and could be out of pocket if you can’t work because of your condition.
To help you make your mind up, here’s when you might not need critical illness cover:
And here’s when critical illness cover could come in very handy indeed:
Critical illness insurance pays out if you’re diagnosed with a condition listed within your policy. Life insurance only hands over the cash to your loved ones when you die. So, if you’ve got life insurance with additional critical insurance cover, you and your beneficiaries will be compensated whether you survive or die — it’s a win-win.
You can also specify how you’d like your life insurance payout to be spent (we like to call them Deathwishes). Whether that’s paying for your own send off or leaving a lovely wad of cash to someone, it’s totally up to you. If you want to know more about life insurance, here’s when to think about it and whether it’s a worthy investment.
Critical, terminal — it might feel like pernickety semantics but they really do mean very different things when it comes to cover.
Critical illness insurance pays out when you become ill with a serious condition. In other words, what you’ve got is bad but it’s not going to kill you for a while unless of course you refuse to follow your doctor’s orders.
A terminal illness is a condition that you’re likely to die from within 12 months.
One good thing is that most life insurance policies also cover terminal illness and will pay out your lump sum when your doctor confirms the diagnosis. Some policies will also pay out if you’re seriously injured and suffer permanent disability. But remember — while most policies offer this, it’s not a guarantee so read the small print.
This is where things can get a little bit confusing, but bear with us. There are two types of health insurance. The first is probably what most of us think of — the sort that offers private care and a choice of how, where and when we’re treated. This is obviously very different from critical illness insurance because it’s about supplementing NHS healthcare as and when you need it.
But there’s another type of health insurance which is sometimes called permanent health insurance or income protection insurance. In truth, it’s very similar to critical illness cover so they’re easily mixed up.
The main difference is that instead of handing over a whole load of cash in one go, permanent health insurance pays you a percentage of your salary over a period of time (which you agree with the insurer). You can still spend the money on what you want but it’ll only be a fraction of your regular monthly salary (typically between 60%-80%).
It’s easiest to think of permanent health insurance as offering you a temporary income to tide you over while you’re just a little bit ill or injured and can’t work.
How much is your food shop compared to the people next door? It’s probably quite different because you like different things. It’s a bit like that when it comes to the cost of critical illness insurance which depends on all sorts of things specific to you, for instance:
Your age
Your health and lifestyle
Your job
How long you want the policy for
Of course, you can also just tag your critical illness cover onto a life insurance policy which can make things a whole lot easier.
No, critical illness policies will only pay out once.
If you don’t win the lottery, do you get your money back? No.
Same goes for critical illness cover, your reward for not claiming is living a healthy life — what more could you want?
We can’t stop you from thinking this, but it’s highly unlikely that taking out a critical illness insurance policy will result in your health taking a calamitous turn.
It can however give you a little peace of mind, knowing that if you do get struck down by some terrible illness, there’ll be cash on hand to make it all just a bit more bearable.
Considering our Near Death cover or still not sure? Take a look at what other people have to say about it all, because there’s nothing like someone else’s oar being stuck in to make things clearer.