What is Critical Illness Cover? A Beginner’s Guide » Small Business Bonfire Otesanya David March 31, 2022

What is Critical Illness Cover? A Beginner’s Guide » Small Business Bonfire

What is Critical Illness Cover? A Beginner’s Guide » Small Business Bonfire


Critical illness is not something that can be predicted. It hits at any time, no matter the age or financial status of somebody. This guide will look at the basics of what critical illness cover actually is, and some of the benefits of having this form of life insurance.

What is it?

Critical illness cover is basically what it says on the tin. It’s a very valuable form of life insurance that ensures you and your family are able to cope financially if you become critically ill. When you take out group critical illness cover within your workplace, a tax-free lump sum is paid out if the child or partner of an employee (yourself) is diagnosed with any of the illnesses that are classified as being covered within the policy.

This pay-out could be used to cover the costs of necessary treatment, subsidize any lost income, or even pay to adapt your home to suit the changing needs of yourself or a loved one.

There are a few things you need to know about critical illness cover before you buy it. first, critical illness cover is not a full coverage policy. That means that it doesn’t provide money for everything that could go wrong with your health. Instead, it offers a limited number of benefits specific to your type of illness.

Second, critical illness cover is not always available to everyone. In order to get covered, you’ll need to be insured by your particular state or province. And even if you are insured, the coverage may not be as comprehensive or wide-reaching as you’d like.

Lastly, because critical illness cover is not always guaranteed, it’s important to read the fine print before buying it. Many policies do not cover any costs associated with nursing home care or long-term care.

Why is it so important?

Critical illness cover provides a long-term solution to what is more often than not a long-term illness. Unless you’re lucky enough to have a substantial amount of money you can afford to use for the care of yourself or a loved one, you’re going to suffer the new costs of living when critically ill.

You or your loved one will either have to give up work for the foreseeable future or hire a carer – something that doesn’t come cheap, whichever way you look at it. On top of this, wheelchair equipment, alterations to your home to allow wheelchair access such as stairlifts, toilet, and shower adjustments… the costs add up.

When you take out critical insurance cover, the worry about becoming sick may still be there, but the worries about the financial implications don’t have to be, allowing you to focus on getting yourself feeling better.

The most common way to get critical illness cover is through your employer. If your company offers medical insurance, then you may be able to get critical illness coverage through your employer. However, if you don’t have coverage through your employer, then you’ll need to find a different form of insurance that will protect you and your loved ones.

Benefits of critical illness cover

Critical illness cover can help you pay for necessary medical bills, such as hospitalization, surgery, and recoveries. It can also help you cover funeral costs, lost income, and other expenses related to your health.

You have the ability to spend the funds in any way you like-

You could use the funds to pay off any existing bills, allowing you to concentrate purely on getting yourself or your loved one better. You could use the money to remodel your house to better accommodate your illness, or even have a little trip away to forget about everything for a while. The freedom is yours.

The pay-out rate is high-

One study in the UK found that out of 15,464 claims, 92.2% were paid out. Having a near enough guaranteed rate of pay-out leaves more time for you to focus on the things that really matter like getting well!

Children are often covered for free

Some insurers offer children’s critical illness cover alongside your own. This is beneficial because if you have to take time off work to care for your children or hire a carer, for example, you don’t have to worry about the money you’re losing out on as much.

With this beginner’s guide in mind, you should now have an understanding of the basics of what critical illness cover is, and why you might want to consider taking it out.

Are there any specific requirements for critical illness cover?

Yes, there are some specific requirements for critical illness cover. For example, you’ll need to have a certain type of illness and be able to document it. You’ll also need to have money in your account to cover the costs of your illness.

There are a few things to keep in mind when it comes to getting critical illness covered. Firstly, it should be noted that critical illness cover is compulsory in all states and provinces. Secondly, you should be aware of the specific benefits that it can provide, including cover for medical expenses, loss of income, and cover for family members. Finally, make sure to check the specific requirements that are required before getting covered, as some may not be available in all states and provinces.


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