Useful Information About Critical Illness Cover

By: Mike Armstrong
TPD is the inability to perform any occupation. Research in the UK can demonstrate that the major of critical illness policyholders may not understand this clearly. As a matter of fact, around 50 percent of critical illness claims related to TPD may have been turned down in the year 1998. Also, Loss of Independent Existence (LIE) is the inability to perform three to six daily tasks. It can be considered similar to Long Term Care (LTC). Furthermore, another form of critical illness included in many policies could be Terminal Illness (TI). Terminal Illness can be described as any situation that may consequently lead to the death of the insured person within 6 to 12 months.

Moreover, at an older age money consuming factors such as long term care costs may crop up due to serious illnesses. Such expenses may be covered by long term care (LTC) insurance. However, the maximum age of taking a critical illness cover may not be fixed too high by many companies. Critical illness conditions may tend to change during the course of time. Therefore, older people may be more exposed to contracting a critical illness than younger ones. Additionally, the figures that show for older people’s critical illness rates may not be as reliable as for the young ones.

So, critical illness evaluation may be much easily done when it comes to young people.

Furthermore, coming back to Terminal Illness, TI can also be joined with the acceleration benefit of a critical illness cover, as an aim to obtain a TI benefit. This type of cover may not be expensive as the higher death rates may crop from a critical illness such as cancer. The benefit cost may be lower in respect to the original sum insured. Terminal Illness may not be appropriate if combined with standalone critical illness plans. These standalone plans may be designed as living benefits. In this connection, the terminal illness cover may act as an additional death cover. So, knowing when a terminal illness began may be difficult to tell, so the requirement of a survival period may become problematic.

Additionally, as one grows older, the risk of antiselection grows accordingly. Therefore, this risk may not be completely eliminated even if alternate measures are used at the moment of underwriting. The age at entry for a critical illness cover may range between 55 to 65. Thus, a suitable late age to take out critical illness cover may be 55 years. The fact remains that a critical illness cover may terminate at the age of 65. Therefore, the insured person, having already reached retirement age may not fear a loss of income should a critical illness occur.

Furthermore, some insurance companies may provide critical illness cover to some people even to an older age of maturity. The benefit can be triggered if it is an acceleration of a life policy with the main policy being whole life or endowment. This can be useful as the insured sums may decrease according to the age and hence become a saving depending on the insurance policy. Many old people die from critical illness so that the elevated critical illness risk may be leveled by the death risk.

Insurance companies may have been working tirelessly to give critical illness cover the status it holds today. New product designs as well as effective options may be part of a more mature critical illness product. But the importance of having a critical illness cover may have remained the same as years have passed by.

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