Don't Get Confused By Critical Illness Cover.

Critical illness cover sounds very confusing so for the people that are unaware of just what this type of insurance is here is a brief guide. A critical illness is a condition that an insurance company offers cover for. They have to underwrite a policy by the means of gathering all of the personal information about the applicant. This may consist of the name, age, sex, address, and generally anything that has affected the health. A critical illness to qualify with an insurance company is something that has to be diagnosed by a medically trained practitioner and certified by them to ensure that a true certification is given and not a self diagnosis.

The Association of British Insurers or for short the ABI have stipulated to insurance companies that offer critical illness insurance an amount of conditions that must be covered by the provider. This is to ensure that all companies have a minimum standard, and of course for the consumer to have some guidelines. They have a certain severity level to meet which can seem unfair but it makes things equal between every insurance provider. There are 12 standard conditions covered by the ABI which are:

1.Alzheimers Disease this must result in permanent symptoms

2.Blindness which is permanent and irreversible

3.Deafness resulting in permanent and irreversible symptoms

4.Kidney Failure which needs dialysis

5.Loss of Speech which remains permanent and irreversible

6.Major Organ Transplant

7.Motor Neurone Disease resulting in permanent symptoms

8.Multiple Sclerosis which has persistent symptoms

9.Paralysis of Limbs which is complete paralysis and irreversible

10.Stroke ending up with permanent symptoms

11.Terminal Illness this will only be covered if a life insurance is combined with the critical illness cover and not if it is on its own.

12.Traumatic Head Injury

After these twelve conditions are covered and listed on an insurance plan, the insurance company can decide to add additional conditions to their policies as they feel appropriate. They can also add conditions that have partial payments on them. Not all insurance companies do this but there are a few out there that do.

Critical illness cover or cover is generally where an applicant takes out a policy to cover them for a certain amount of money; this is called the sum insured. The sum insured can be variable dependant upon the applicants circumstances. This could be to cover a mortgage or other debts or even to be left as a lump sum to their loved ones. In return for a monthly direct debit which you agree to you can be paid out an amount of benefits from the policy for being diagnosed with a specified critical illness. You need to ensure that you have enough cover in place but not too much so that you are not paying over the odds on your monthly premium. There is no specific question asked as to why you are taking the cover out.

When a company that offers a critical illness cover plan must put confirmation in writing with a stipulated amount of illnesses that are covered and any additional ones that they decide upon, these are called the terms and conditions. The company will also provide a key facts sheet which is a brief description of the main important facts to enable you to have a quick reference without reading through all of the main terms and conditions. Should a policy holder be diagnosed with one of these conditions they are typically acceptable to make a claim. Upon approval from the insurance company the monies due from the insurance plan will be paid out in a tax free cash lump sum. This can be used by the applicant or living relatives however they so wish. Once a policy has been paid out it is normally terminated and can no longer be claimed upon.