Is critical illness cover the same as serious illness cover?

Critical Illness Cover is indeed the same as Serious Illness Cover. It’s an insurance policy that pays you a tax-free lump sum if you are diagnosed with one of the specific illnesses or disabilities that your policy covers.

What can critical illness cover do?

It will pay you a tax-free lump sum, if you suffer from one of the illnesses covered by your policy.

What can’t it do?

  • Critical Illness Cover can’t replace your income long-term, if you’re unable to work due to illness. It just provides a lump sum.
  • Your policy doesn’t pay a claim unless the illness you develop is one of the illnesses covered by your policy.
  • A medical diagnosis has to match the definition of the illness as outlined in your policy terms and conditions.
  • You also have to survive for a period after diagnosis, typically 7 to 14 days.

What about Partial Payments?

Insurers include a list of conditions in their policies on which they will make a partial payment. These are usually less severe, but still serious conditions. There will usually be a range of between 20 to 35 conditions that an insurer will make a partial payment on.

They will also make a partial payment for children diagnosed with these illnesses. This is usually 25% of the sum insured, to a maximum of roughly €5,000 to €7,500.

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How Much Does it cost?

Insuring yourself for €75,000 of Critical Illness Cover will cost more than insuring your life for €75,000. This is because you’re more likely to get ill than you are to die.

  • The cost of your policy will be affected by these main factors:
  • The term of your cover
  • The amount of your cover
  • Who the policy covers – a policy for a single person would cost less than a policy with joint cover for a couple.

What else do I need to know?

One of the most common ways to buy Critical Illness Cover is as an additional benefit on a Mortgage Protection or Life Insurance Policy. You can also apply for a standalone policy, that covers Critical Illness only. 

If you take out Critical Illness Cover with a Life Insurance Policy, you will also need to decide if you want Accelerated Illness Cover, or Additional Cover.

Should I get critical illness cover?

Yes, if any of the following sounds like you:

  • You have no other ill health cover
  • You’re not in paid employment, so you can’t get Income Protection Cover
  • You have a mortgage, debt, or other personal loans that you would still have to service if you were ill and couldn’t work.
  • You have dependants who rely on your income, and/or unpaid work, such as the work you do in the home, or family business.
Accelerated Illness Cover

Example: You have a Life Insurance Policy with €200,000 Life Cover, and Accelerated Illness Cover of €100,000.

You become ill with cancer, and make a claim for €100,000.  This leaves you with €100,000 Life Cover remaining. 

Additional / Standalone Illness Cover

Example: You have a Life Insurance Policy with €200,000 Life Cover, and Additional Illness Cover of €100,000. You become ill with cancer, and make a claim for €100,000. 

This claim does not affect your €200,000 Life Cover.

Accelerated Illness Cover  will usually cost less than for an equivalent policy with Additional Illness Cover, as the overall amount of insurance is less.

What illnesses does a critical illness policy cover?

Each policy is slightly different, but they provide full payments based on diagnosis of roughly 45 conditions, and will also provide partial payments for a further 25-30 diagnoses. We can provide details specific to each lender.

What else should I know?

Children can’t get life or serious illness cover policies themselves. They can be covered by their parents’ / legal guardians’ plans.

Critical Illness policies will usually make a payment of 50% of the sum covered, up to a maximum of roughly €20,000 to €25,000, depending on the insurer.

How much per month?

Example: Mike is 30 and a non-smoker. He wants a policy that will pay €150,000 in the event of his death, and €75,000 in the event of a serious illness, for 20 years, until his son is 25. 

Mike can get a range of quotes for life and standalone illness cover, between €26.88 per month, and €33.99 per month. 

If Mike wants to choose life and accelerated illness cover (where an illness claim reduces his overall sum insured), he can choose between €23.14 per month, and €30.98 per month.

That’s more affordable than I thought. Where do I start?

Run a quote for yourself here. It’s quick and easy.

I’m available if you want to chat, I’ll help you to look at the options available, and find the best protection for you and your family.

About Debbie Cheevers

Debbie qualified as APA in 2017 and a fully qualified financial advisor (QFA) in 2018. She believes that product knowledge is key to helping customers make the right choices.

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