We will cover some of the important information on critical illness policies to get a better comprehension of this type of policy. This is simply not a fully comprehensive list but we will cover the main issues you require information on.
1) What will your premiums be: this will depend on age, term from the policy, can you smoke or otherwise not, the amount of cover required, have you got any pre medical conditions have you got a family history with members suffering a critical illness as well as your weight. This is the major factors that will affect just how much your premium is going to be.
2) Will my premiums change: there are two types of premiums associated with these types of policies which a guaranteed or renewable. Guaranteed can be as it says and guarantees your premiums is not going to increase in the future and because of the is generally higher priced than reviewable premiums at the outset of the policy however it can be beneficial for policies running for 10 years or more. Reviewable premiums however will be reviewed every 5 years by the provider and generally depending on the claims they have experienced during this period will have an impact on your premiums for the following 5 years and so on until your policy expires. This may result in you paying more in the long run and you have no control of the rise the provider could levy on your policy. If you have a short term policy between 5-10years this really is generally the more sensible choice of the two.
3) How much will my policy spend: firstly remember that these types of policies have no cash in value anytime so if you usually do not make a valid claim during the life of a policy you will not have any of your payments back. The protection will either spend a fixed sum or perhaps a reduced sum depending on the cover you have selected at the outset of the policy but whichever one you’ve selected the payment you receive in the event of a valid claim will be tax free even though this could change in the future. If you have selected level term critical illness then your payment you will receive in the event of a claim will be the amount you selected first of the policy but on the other hand if you have selected the decreasing term option then a payment will appear reduced by an equal portion over the term from the policy if you have a ten year term on the policy along with a sum insured of ?100,000 and create a claim Five years into the policy you will probably be paid out somewhere in the region of ?50,000 which is the primary reason these types of policies are cheaper as the liability towards the provider reduces annually of the lifetime of the policy. This type of policy would certainly be used for somebody who has a repayment mortgage in order to protect a loan as both balances reduce over time.
For more information visit www.moneyandme.co.uk or click here Critical Illness