Alzheimer’s is now listed as one of the most common critical illnesses. The number of dementia sufferers in Britain is forecast to rise to over one million by 2025. Care can be costly but it is important to ensure that you know exactly what is covered and what is exempt in the cover offered by different insurers.
Despite new guidelines on sickness policy cover, there is a huge variation in the types of critical illness cover offered by different providers. Consumers need to look at the small print, for exclusions in particular. The industry needs to do more to promote alternative products such as family income and income protection policies.
Life insurance helps your dependants to be financially secure in the event of your death. When you buy life insurance you stipulate the figure you want the policy to pay out when you die – this term is the sum assured. The premium you pay is based on this amount, and on your age and gender.
If you have a family history of health problems or if you drink or smoke heavily you might be under the illusion that critical illness cover or life insurance cover may be extortionately expensive. Marketing manager at Scottish Equitable Protect, Heather Armstrong, says this isn’t always the case, "Many of those drinking, smoking or eating 'too much' may well shy away from cover for fear of being unduly penalised for their bad habits. However, they will most likely find that these vital forms of financial protection cost far less than they think."
Life, critical illness insurance and income protection policies are out there in abundance but hardly anyone is buying them according to Swiss Re – their estimated funding shortfall is an astounding 2.3 trillion. Although everyone wants only the best for their families thousands of them risk financial ruin because they have not taken steps to protect them if anything happens to the main breadwinner.
Andrew Merricks, head of investments at Brighton-based financial adviser Skerritt Consultants, warns that it is very short-sighted of people not to have Life Assurance and/or Critical Illness Insurance as he insists that life has two main risks - either living too long and dying too soon. "It's absolutely crucial to have some cover in place – particularly if you've got a young family," he says. "These days you need to build your own little welfare state because no one else is going to do it for you."
Life Assurance, Critical Illness and Permanent Health Insurance should all be considered by people who have a spouse or children or anyone who works so that they have financial security if they died or could not work. Below we explain what is available and most relevant to you.
If you have a test taken, to see if you have genes that show you may be at risk of developing a life threatening disease, the British government allows your insurance company to look at the results. Governments in the rest of Europe ceased this as they feared the results could be used by insurers to perhaps increase premiums or even refuse cover altogether.
Many patients suffering from chronic conditions such as cancer were feeling slightly more optimistic, when the decision was made to allow patients access to the very best drugs and treatments without losing their basic national health care. It seems hard to believe that, prior to the decision by the government, where all National Health treatments for a patient had been exhausted and the NHS budget could not fund further and very expensive treatment, patients were left to fund all treatment.
Private medical insurance will pay for all the consultations, examination, tests and operations which are necessary for your illness. You will be treated in a private room and there will be virtually no waiting lists to contend with. You will have a choice of where and when you are treated. These plans can be taken as an individual, a couple or a family. They are normally on a yearly contract and premiums can usually be reduced by paying an excess on each claim.
The waiting time for a National Health Service appointment in the UK varies tremendously, but in general can be anything up to 18 weeks. No wonder that some people are taking the alternative route and opting for some form of private medical insurance to assure their treatment. The knowledge and reassurance that medical care is available whenever they fall ill or receive an injury is invaluable.
When it comes to taking advantage of you health cover the first decision is whether or not you need to see a doctor privately. Your GP may advise you on this and depending on the way your insurer works, you may need to find an idea of the cost involved. Some insurers require that you settle your bills with the consultant or hospital, whilst others prefer it if they’re left to settle the hospital account directly.
What would you think of a mortgage which is part of your current account and could, in part, be paid by the interest on your savings? It has certainly aroused lots of attention and the number of these mortgages has multiplied something like twenty times over a seven year period.
Fixed rate mortgages are very straightforward. At the beginning of the mortgage agreement, the agreed interest rate is fixed and it then is applied throughout the term, or length, of the mortgage. A large proportion of fixed rate mortgages are arranged for a term of two or three years, although it’s possible to go for a longer time-span.
There are times when “everyone” seems to be talking about re-mortgaging. “Everyone” thinks it’s the thing to do and can’t imagine why you haven’t done anything about it. It’s a bit like the kids that tell you that “everyone stays up until 11 o-clock at night”. Which you take with the pinch of salt that it deserves, of course.
When the Bank of England base rate is low, your mortgage may be cheaper than you’d expected when you took the loan out. Lots of people (around 4 out of 10 mortgagees are now using trackers), have this type of loan, tracking the Bank of England’s base rate, plus just under one per cent above it. This may well be wonderful news when rates are low, but what do you do with the saving?
If you’re getting restless and feel that it’s time for a change of scene, don’t automatically think of a move. If you need a bigger house for family reasons, or it’s necessary in order to take up new employment, then that’s a different matter and it may well be that you have to get into the sales process, with all its chains, broken promises and disappointments.
Few of us are insured against serious illness even though it may strike at anytime. Unum Provident, the income protection provider, has carried out research that reveals only 4.2 per cent of the country’s work force have critical illness cover, even though they will receive a lump sum if they have a heart attack, stroke or suffer from cancer.
Protection menus which offer customers opportunity to pick ‘n mix health and life cover in a single comprehensive policy have been around for over two decades. Unfortunately the original versions did not prove to be very attractive to customers although the concept was right. Direct debit, a single set of paperwork and administrative savings were welcomed by both the insurer and the consumer. However the benefits offered by these menus were outweighed by the drawbacks.
Your mortgage lender may offer you several financial products including critical illness cover. However, as they are not specialists in this field, you will probably find a better deal elsewhere. The level of cover on offer is just as important as the premium when looking for critical illness cover.
