Get critical illness cover for peace of mind

Illnesses that used to be fatal are now survivable, so it makes sense to protect yourself from the fallout.

Nearly two-thirds of the population have no form of financial protection if they die or become critically ill, despite advances in medicine and technology that mean more people are living longer and surviving illnesses that used to be fatal. In research conducted by insurer Aviva, most people aged 45 to 54, the age group most likely to claim, say they cannot afford protection.

But a debilitating illness can take years to recover from – and while your company may readily allow you sick leave, it can be restricted to a pay percentage or term length. Without a source of income, family savings can quickly dwindle on the essentials – let alone expensive medical care, or unexpected costs.

Although most homebuyers take out life cover to ensure loved ones are provided for in the event of their death, few people realise the financial implications of surviving – but in serious ill health.

Critical illness cover typically provides an individual with a lump-sum payment or monthly income if they survive for at least 14 days after being diagnosed with an illness that meets the policy’s criteria. These can include cancer, Alzheimer’s, multiple sclerosis, organ transplants, a stroke or heart attack among others. Cover cannot be purchased for a pre-existing illness and the younger and healthier you are, the lower your monthly premium – so it pays to be prepared. Premiums can be guaranteed or reviewable, meaning monthly payments are fixed for the term of the policy or can change on an annual basis. Customers can choose which type is best for them depending on their needs, as reviewable rates are initially cheaper, but the rates are reviewed every five years at which point they could increase. Guaranteed rates ensure customers pay the same premiums throughout the life of the policy.

As technology allows us to live longer, illness blights lives. Assuming you will be one of the lucky few is not practical – nearly two thirds of the population has not bought any form of protection, such as life insurance or critical illness cover, but one in three of us will be diagnosed with cancer, and every year about 5,000 people in Ireland have a heart attack. Each year, 1,000 people under the age of 55 suffer a stroke.

Axa says that the average age at which people claim for critical illness cover is 43 for a man and 40 for a woman – a time when expenses are high, with children still at home and a mortgage outstanding. This means that without cover they may struggle.

You can buy critical illness cover in conjunction with life cover, and some company health policies include it as standard, so it is advisable to check what cover you have before taking out a new policy. Some life insurance policies may pay out if you are diagnosed with a terminal illness – but not if it is in the final year of the benefit term. If you are self-employed or run your own business, critical illness cover will not just protect your family should you become ill, but your business, too. Company policies may pay for your bills and mortgage, but they often won’t stretch to other expenses such as child care or travel. Aviva offers ”integrated” critical illness cover that includes life cover to a selected sum – usually the amount outstanding on the policy holder’s mortgage.

When buying a critical illness cover, consider whether the policy matches your needs. For example, some insurers will automatically include children’s critical illness cover to your plan – while others will have an option to include a spouse. You may want overseas cover should you spend time abroad, or are planning to retire overseas.

Life cover may be affordable, but you are much more likely to become seriously ill than die before you reach retirement age.