Critical illness cover (CIC) is an insurance policy which provides financial protection when faced with life-altering medical diagnoses.
Upon the occurrence of a specified critical illness, CIC ensures beneficiaries receive a tax-free lump sum.
What is critical illness cover?
Critical illness cover acts as a supplement to traditional life insurance, stepping in when diagnosed with severe health issues such as:
- Multiple sclerosis
- Cancer
- Crohn’s disease
- Heart attack
- Kidney failure
- Stroke
- Major organ transplant
The primary aim is to provide financial protection if a critical illness strikes.
It is not the same as life insurance, which pays out a sum if you die.
I thought critical illness cover wasn’t available for people with diabetes?
Historically, critical illness cover has not been available for people with type 1 or type 2 diabetes. Insurance is a game of risk calculation and type 2 diabetes was perceived as a high-risk condition, with potential complications that could trigger the policy.
However, times have changed and diabetes management has become far more sophisticated with many people with diabetes maintaining optimal health for extended periods of time.
It is only in the last few years that type 2 diabetes remission has become widely accepted.
Therefore given the advancements in medical science and in particular understanding of type 2 diabetes, critical illness products tailored for people with type 2 diabetes is finally available.
What factors affect the cost of critical illness cover?
The cost of critical illness cover (i.e. premiums) takes the following aspects of your health into consideration:
- Optimal management of diabetes
- Diagnosis after reaching 30 years of age
- Recent diabetic check-up within the last year
- Absence of diabetes-related complications
- No smoking within the last year
- No hospital visits due to diabetes in the last 3 years
- Maintaining good cardiovascular health and a BMI under 38
The very existence of such a cover highlights the changing perceptions of diabetes and acknowledges that a diabetes diagnosis doesn’t necessarily translate to overall poor health.
How can critical illness cover assist me financially?
In situations where illness or injury prevents work, having financial support not only provides peace of mind but can also contribute significantly to the recovery process.
Should you be diagnosed with a critical illness within your policy term, the tax-free payout from your CIC policy can be used for:
Medical expenses
Use the lump sum to cover unforeseen hospital and medical bills.
Home adjustments
Use the lump sum to aid in modifying your home to cater to post-illness needs.
Daily living expenses
Use the lump sum to ensures daily life continues smoothly, even when income is compromised.
Mortgage or rent
Use the lump sum to assist with payments for your home with mortgage or rent payments.
With the funds to address immediate financial needs, individuals can focus wholly on regaining health and returning to normalcy.
