It is really important to understand the different types of protection that is available for you and your family if you suffer a serious illness or die. Many people consider life assurance to be the most important and ignore the other two types of protection policy that can help you – critical illness cover and income protection. Over the next couple of months we will take a look at the differences and try to establish which one, or more than one, you might need at different times in your life.

This month we will look at critical illness, probably the most recent of the three to be available.

There was a time when people who suffered a heart attack or had a stroke usually died, and their life assurance paid out. But advances in medical science means more and more people survive heart attacks, strokes and other serious illnesses but are unable to work and need constant care in certain cases. Their life assurance provided no real benefit at that stage in their lives because they were still alive but often as the person couldn’t work or needed care there was a requirement for a lump sum of money, or a regular income to help fill the gap. That is where critical illness came in to play.

Critical illness insurance is designed to pay out if you suffer from one of a range of serious illnesses covered by the policy. Unlike income protection, which also covers illness, there is no requirement to be off work for a claim to be successful; the trigger for a critical illness claim is the fact that you have been diagnosed with an illness that is covered by the policy.

Initially critical illness policies covered three main illnesses – heart attack, stroke and cancer – and these conditions still trigger the vast majority of claims. The policies available now cover a much wider range of illnesses including multiple sclerosis, Parkinson’s disease, blindness, deafness and loss of limbs. A number of plans will also have a ‘catch-all’ clause called ‘permanent total disability’ that will generally, although not always, allow a claim when you are told you are not going to be able to work again in any capacity.

Critical illness is definitely an area where you need to read the small print before deciding which policy is best for you and this is where McCreas can assist as it’s not all about price, and cheapest might only be cheapest because it covers fewer illnesses and conditions than the more expensive policies. We review the different plans and options available and find the policy that is most suitable for you.

Critical illness policies will, in common with most other insurances, have certain exclusions, and these will normally include pre-existing conditions, self-inflicted injury, and alcohol or drug abuse. Most critical illness policies will only pay out if you survive for 28 days after you have been diagnosed with the illness you are making a claim for.  This may not be relevant if you buy one of the ‘combined’ policies that cover death as well as critical illness.

We will come back to these plans in a few weeks' time and look at the different types of critical illness policy available and how they interact with life assurance and income protection.

There are many different plans available and this is where we can help ensure you have the correct type and level of cover and protection for you and your family