By Katherine Pautard

We all know someone who has been affected by a critical illness, either yourself or someone close to you. It’s a very distressing time for anyone, and something no-one wants to think about as a possibility in life, but statistically it wouldn’t be sensible to ignore it.

A critical illness doesn’t mean an ultimate result in death anymore. The survival rates have dramatically increased. However, it is still a stressful, time-consuming and worrying event, which changes your outlook in life, can impact your ongoing health massively meaning you can’t continue with your existing commitments and be draining mentally, emotionally, physically and financially.

By 2030, it is estimated that there will be 4 million living people who have been diagnosed with cancer and a significant number of these people will survive for more than 10 years.

Our biggest contracted expense in life, is usually a mortgage. When arranging one, often people only focus on insurance to repay that liability in the event of their death and ignore the potential of a critical illness. Statistically, you are much more likely to be diagnosed with a critical illness than die during your working life and these chances increase with age.

You cannot guarantee, and it is very unlikely, that you will get sufficient sick pay from your employer, if any at all.

A Critical Illness Policy is a type of insurance that pays out a lump sum if you are diagnosed. It is designed to help support the insured and their family while they deal with the diagnoses without having to worry about bills, mortgage payments, supporting their loved ones and all the everyday costs that life has (unfortunately these outgoings do not stop just because you are ill)! It can also help you plan your new future, whatever that looks like, with some financial security.

Financial advice is recommended when finding the right policy for you, especially as you can only claim for an included critical illness that is set out in the policy conditions stated by your chosen provider. Although a great piece of kit to have in your ‘toolbox’, like anything, it still is very important to understand what you are signing up for.

Critical Illness cover is suitable for almost all clients. Even if you don’t have a family that you are financially responsible for, you don’t have a large mortgage or any at all, a significant pay-out gives you the ability to pay for more private treatment instead of relying on the NHS, or to feel more comfortable about taking a longer time off work to recover. It may allow you to retire early and not have to return to work at all.

I don’t personally have any financial dependants, but I have Critical Illness Cover so I can pay off my mortgage and allow me to just focus on my health. I also have income protection, to cover a proportion of my lost income, should I need extended periods of time off for treatment. My colleague Chris discussed this in our last newsletter. So do you need it?

To decide, it is worth considering the following:

  • Do you currently depend heavily on your salary to support you and your family?
  • Do you have enough savings to live on if you were to become seriously ill or disabled?
  • Do you have large liabilities that will need to be repaid in the event of being diagnosed with a critical illness?
  • How long will your employer cover your salary if you were off work due to illness?

Please get in contact to discuss this further with your Financial Planner.