Protection Insurance A Must If Illness Is Critical
Summary
The benefits offered by life insurance cover are compared with the benefits of critical illness insurance cover. It is advisable to sign up for critical illness insurance now and the reasons why.
Ask yourself this question Could you pay your monthly bills, if illness prevented you from working? The vast majority of us would say No. So without doubt we need to think about taking out insurance against unpredictable events.
A standard critical illness policy would settle a tax free lump sum if the insurance policy holder is diagnosed with a potentially critical illness. The lump sum can be used in various ways. For instance, you could make alterations to your home to accommodate a wheelchair,simply settle your bills or pay off your mortgage.
The coming months will see a big price rise, so if you haven’t got any insurance cover at present, now is the time to get insured. The cost of life cover has come down over the past twelve years. There are many reasons why this has occurred. Firstly the Aids epidemic, that was expected in 1998-1984 never materialised and secondly the recovery rate of those suffering from heart attacks and cancer has very much improved. These issues have enabled insurers to reduce premiums.
The reverse is factual for critical illness policies where the number of people claiming has risen substantially recently and so payments have risen. Protection insurance is frequently re-evaluated by insurers, when the number of claims for certain illnesses are assessed.
Following such a review Scottish Provident will be modifying premiums shortly, with the cost of life cover decreasing slightly and the premiums for critical illness cover rising. The insurer is not able to say by how much, as the individual’s circumstances and the sum covered vary from client to client, but the rise should not be huge.
On the other hand Direct Line is predicting that there could be a rise of between twenty five and fifty per cent in critical illness insurance premiums in the next few months. It also suspects that fixed premiums may also become unaffordable for some people, or even die away due to the volatile marketplace.
Swiss Re has announced that it is refusing to underwrite critical illness insurance policies from the end of the year as the policies are costing them too much.
The price of cover has been put up by 2 of the largest high street insurance companies. A 20 to 25 % price increasehas just lately been broadcast by Legal and General and Swiss Life. On the other hand this is very little compared to the incredible price increases written into the covers now provided by PPP and Standard Health Care, which differ between forty to fifty per cent.
It is presumed that this movement will be followed by all the other re-insurers. Guaranteed premiums where the monthly cost is held for a certain period, normally ten years, may no longer be offered by insurers.
Henceforth, premiumswill be reviewed yearly, just like car and home and contents insurance. The outlay for the consumer will be much larger in the long term. The implication is clear. life insurance is becoming more costly so buy it now to benefit from guaranteed rates and the relatively low rates being givenat the present time. Let us hope that you will never have to claim, but figures state that unfortunately many of us will.