Do I need critical illness insurance and what is it?

As part of your overall financial planning it may be of benefit to consider the option of critical illness insurance cover, what it entails, and whether it would be important with regards to your family and loved ones future financial peace of mind.

The subject of life insurance is common knowledge and indeed many people are aware of its importance with regard to their personal financial planning, especially if they have a loan or mortgage policy to insure. But the problem is that far fewer are aware of critical illness cover and its importance with regards to their personal financial planning.

Critical illness insurance is unique in so much as it is a type of insurance that can and is added as an additional benefit but can also be taken out as a standalone contract in its own right. The aim of this type of benefit is to pay out the sum assured should the insured person suffer one of a range of critical illnesses, such as heart attack, stroke, cancer, major organ transplant and many more.

The important thing about this type of insurance is the fact that payout is not dictated by any outcome of the condition. It is purely dictated by the fact that you suffered the condition in the first place. This means that should one of the worst things actually happen such as you suffering a heart attack, then the benefit will pay out and this is regardless of the fact that you may make a full recovery, which is something that does happen quite frequently nowadays, especially with modern day medical advancements.

So you can see just how beneficial this benefit can be, whether taken out as a separate policy or as an additional benefit to an existing one. But what type of policies can it be added to? Well it can run in conjunction with whole of life and level term insurance and, more importantly, mortgage protection.

It is mortgage protection or mortgage life insurance where this type of benefit is most valuable. You can have a mortgage and, should you die you would want it to be repaid of course, but not many people give very little thought to what would happen if they do not die. Lets say you have a heart attack and you don't die you have to convalesce for e few months with no income coming in. It is this very reason why critical illness insurance is so valuable. It makes sure that debts are taken care of thus ensuring you the peace to recover without the stress of worrying about were money is going to come from.

Over and above mortgage life insurance critical illness cover has a bit of a rich mans reputation. That's to say that people only take it out if they can really afford it and many find other things that require money be spent rather than critical illness cover. This is a shame as within your normal situation this type of cover is most valuable, once the loans are paid off additional money can be a huge benefit, maybe to adapt a home or even to take you on a world cruise, I probably don't need to teach you how to spend it but I am sure you get the picture.

In conclusion, critical illness is a much more useful form of cover than you think. Some people consider it better even than life insurance as you can get to see the benefits of it without having to die. This type of cover is definitely recommended with mortgages and loans, but at the end of the day only you can decide if critical illness is what you think you need or can afford. The best plan of action is to speak with your financial advisor to discuss your options so that you have the right sort of cover and level of protection for you.

Article Source: http://www.myaddirectory.com

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