Decreasing Term Critical Illness

What does decreasing term critical illness insurance cover?

Decreasing term critical illness insurance provides a lump sum (a specified amount of money i.e. £100,000 at policy inception or start date reducing to £0 by the end of the term) in the event of a confirmed diagnosis of a defined critical illness during the term.

It’s called decreasing term critical illness insurance as the amount of the lump sum decreases in line with a specified percentage reduction on each policy anniversary.

The term is the period of time the policy is in force.

Why is decreasing term critical illness insurance cover useful?

Decreasing term critical illness cover is useful in the event of diagnosis of a critical illness. The proceeds from a claim can usually completely pay off your mortgage debt, if your cover allows for this. 

Decreasing term allows for the policyholder to continue to pay off the mortgage as usual until they are fit to return to work. This cover is cheaper than level critical illness cover and enables you to adjust to the changing needs of your family.

What term can decreasing term critical illness insurance cover be taken for?

.A decreasing term is usually taken out solely to protect a mortgage or some debt which has an outstanding balance which will need to be paid. As it’s usually taken out for a mortgage, you’ll find it it will be the same term as the mortgage, typically of 25 years but can be taken out for up to 40 years. 

What can I claim for with decreasing term critical illness cover?

Each policy will vary in terms of definitions which you can claim for, but generally you should be able to claim for the main critical illness such as heart attack, stroke or cancer. Upon diagnosis decreasing term critical illness cover will kick in and you can use the proceeds to pay off your mortgage. 

What affects the cost of decreasing term critical illness cover?

Common factors including age, weight, general health and wellbeing and pre existing medical conditions will all affect the cost of your policy. As well as this, the number of serious illnesses covered under the policy can also significantly impact the cost on your premium. Generally the more illnesses that are covered, the higher the premiums will be as there is a greater risk for the insurer paying out on the policy. 

THESE PLANS TYPICALLY HAVE NO CASH IN VALUE AT ANYTIME AND COVER WILL CEASE AT THE END OF THE TERM. IF PREMIUMS CEASE, THEN COVER WILL LAPSE.

IF THE POLICY HAS NO INVESTMENT ELEMENT THEN IT WILL HAVE NO CASH IN VALUE AT ANY TIME AND WILL CEASE AT THE END OF THE TERM. IF PREMIUMS ARE NOT MAINTAINED, THEN COVER WILL LAPSE.

CRITICAL ILLNESS PLANS MAY NOT COVER ALL THE DEFINITIONS OF A CRITICAL ILLNESS. THE DEFINITIONS VARY BETWEEN PRODUCT PROVIDERS AND WILL BE DESCRIBED IN THE KEY FEATURES AND POLICY DOCUMENT IF YOU GO AHEAD WITH A PLAN.