Level Term Critical Illness
What does level term Critical Illness Insurance cover?
Level term critical illness insurance provides a lump sum (a specific amount of money i.e. £100,000) in the event of a confirmed diagnosis of a defined critical illness during the term.
The term is the period of time the policy is in force.
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Why is Level Term Critical Illness Insurance useful?
It provides you with an agreed amount of benefit over a term which you’ve chosen. For example, if you wanted £100,000 of critical illness cover to be paid out on the diagnosis of a critical illness, then that will be the amount that will be paid as a result of a successful claim.
Unlike decreasing term critical illness assurance, that policy will pay out a decreasing value over the term.
The premium is usually guaranteed, which means it says that same throughout the term of the policy. There is an option which allows you to increase your premium and benefits inline with inflation so £100,000 today would still be worth the equivalent of £100,000 at the time of your valid claim.
What term can a Level Term Critical Illness Insurance policy be taken for?
The minimum length of cover will vary from lender but will usually be 2 years with a maximum policy length of up to 50 years. Your policy will also usually have to end once you’ve hit a certain age, e.g. once you’re 75 years old.
What is a Critical Illness? – definitions
Each insurance provider will operate differently and may have different definitions for what they consider a critical illness and what they will cover, so it’s advantageous to speak to an adviser to see what insurance product is most-appropriate for you.
Being left ill can leave you out of pocket, especially if your illness requires you to take some time of work or prevents you from working again.
Everyday expenses, paying off your mortgage or medical expenses can become in issue for some, so if so it’s great to have the right cover in place, tailored to your needs to prepare for the worst case scenario.
Before taking out any Critical Illness cover, check for any exclusions which may affect you.
Level Term Critical Illness Cover vs Decreasing term?
How many times can you claim on your Critical Illness Policy?
Generally you can only claim once, with some providers offering policies allowing for multiple claims, but these will come at a higher cost.
Do I pay tax on the benefits of Level Term Critical Illness Insurance?
When you pay for a critical illness policy, any payout you may receive will be completely tax-free. From HMRC’s point of view you have already paid taxes on what you’ve used to pay for this protection/insurance and therefore it is yours tax-free.
If I don’t claim do I get any money back on a Level Term Critical Illness Cover?
No. Your critical illness policy is taken out to provide cover over a set period of time should you experience any ill health, accidents or sickness which is covered under your particular policy, and does not act as a savings/investment fund.
Should I speak to an adviser for my Level Term Critical Illness Insurance?
What protection do I have if I receive advice from You 1st Mortgages?
We will request quotes from leading home insurers based on your needs.
We will advise you to what in our expert opinion is the best product for you, taking into consideration, affordability.
If you have any queries, we will answer them.
If you need assistance with a claim, we will help.
We will arbitrate on your behalf if you don’t get the decision you were hoping for when you put in your claim.
We will stand by our advice. We will stand by you. We will put You 1st.
What is the difference between a Critical Illness and a Terminal/Chronic Illness?
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.