What can you do now to protect your own financial future and have peace of mind that your family is safe and taken care of?
Find out what are the differences between Critical Illness and Income Protection insurance and how can you benefit from having them.
Critical Illness Cover (CIC)
Critical Illness Cover is an insurance policy that pays out a tax-free lump sum if you are diagnosed with a condition that is listed on your policy.
The critical illness cover provider that you choose will have a specific list of illnesses that are covered. If you are diagnosed with any of the conditions on that list, then your critical illness cover will usually payout. If you get an illness that is not on the list, you will not receive a payout.
The illnesses covered are most often serious illnesses, such as cancer, heart attack, or stroke.
A policyholder is typically paid out a lump sum once their life-threatening condition has been diagnosed by a medical professional. Checking the policy wording is therefore absolutely essential as different policies cover different critical illnesses and some pay out sooner, some later.
The lump-sum payout can provide valuable financial support and could be used to pay household bills, cover loss of earnings, or pay for private medical treatment.
Income Protection Insurance (IPI)
Income Protection Insurance (sometimes referred to as permanent health insurance) is designed to provide you with tax-free regular financial support (like an income, as opposed to a lump sum) if you need to take extended time off work because of illness or injury to avoid having to otherwise rely on savings, or on sick pay.
Income protection policies are designed to cover most illnesses that leave you unable to work either in the more long term (depending on the type of policy and their specific definition of incapacity).
The regular income protection payments ensure that you can continue to pay your bills and meet other financial commitments, allowing you to remain financially stable as you focus on what really matters - getting better.
Most policies are designed to pay regular sums of money until you can start working again, or until you retire, die or the end of the policy term - whichever is sooner and provide for multiple claims over the term of the policy.
Every policy is different and will cover different conditions and levels of health and so as ever, if is essential that the wording of the policy is checked in detail to ensure that it meets your specific needs.