One insurer is offering 10,000 applicants free critical illness insurance for a year.
Critical illness cover can be a very useful form of insurance. It means that if you get sick with a certain type of illness, you will receive either a lump sum or a regular monthly income.
And one insurer is offering 10,000 people the chance to get the cover for a year without paying a penny.
A year’s free cover
Insurer Bright Grey is turning ten years old, and to mark the occasion it is offering a year’s free critical illness cover, worth up to £20,000, to 10,000 people.
It will be offered to the first 10,000 people who apply for life cover under its personal protection menu from 22nd April.
Who needs critical illness cover?
Critical illness cover, much like life insurance, is not for everyone. It’s there to cover for your living costs should you suffer an illness, but you may have a lot of money set aside in savings to cover such an eventuality.
Equally, you may be fortunate enough to have an employer who offers a great benefits package In the event you need time off, or a partner who can cover your living costs should you not be able to work for a while.
However, if that doesn’t apply to you, you will need to work out what you would do if you got sick. Critical illness insurance may be a wise safety net to go for.
What does it cover?
Another important thing to consider is that not all critical illness policies are the same. You know where you are with life insurance – if you die during your term, your family will get a payout. It’s not that simple with critical illness insurance.
[SPOTLIGHT]Let’s take an example. I’ve just switched critical illness policies. My old policy offered cover on 27 different illnesses. However my new policy offers cover on more than 40, including prostate cancer, Chron’s Disease and encephalitis, none of which were covered with my old policy.
So it’s really important that you don’t just compare on price when picking a policy and read the small print too.
What will it cost me?
Which brings us neatly on to the cost of critical illness cover. You almost always buy critical illness alongside life insurance, rather than as a separate standalone policy, so in the example below I’m going to look at quotes for decreasing term life insurance with critical illness.
This is cover where the exact amount you would receive decreases over time, a popular type of cover for people with mortgages.
Let’s take the example of a 30-year old male non-smoker who wants £200,000 of cover for a 30-year term, using Lovemoney’s life insurance engine.
|
Insurer |
Monthly premium |
|
Beagle Street |
£30.37 |
|
Aviva |
£33.30 |
|
Legal & General |
£33.63 |
|
Bright Grey |
£34 |
|
Scottish Provident |
£37.32 |
£30 a month for that level of peace of mind strikes me as pretty good value. Of course, you will need to look at exactly what is covered in each policy before signing on the dotted line.
Non-disclosure and making a successful claim
Critics will point out that some insurers have a disappointing payout rate on their critical illness insurance. Indeed in 2011 Scottish Widows paid out on just 87% of claims, leaving many policyholders upset.
The main reason claims are turned down is non-disclosure. This is where the person who is taking out the critical illness insurance doesn’t tell the insurer something relevant at the time of application. It may be lying about when you last had a cigarette to failing to mention a previous illness or injury.
To try to reduce the number of claims that are refused for this reason, new rules have been introduced to force insurers to ask more relevant questions. To find out more, check out New law makes it easier to make a successful insurance claim.
And if you want to make sure your insurer doesn’t say no, read Make a successful claim on your critical illness insurance.
You might also want to consider taking out a different form of insurance called income protection insurance, either as a supplement to critical illness cover or as an alternative. Read this guide for more information.
Do you have critical illness insurance? Do you think it’s good value for money? Let us know your thoughts in the comment box below.
More on insurance:
Make a successful claim on your critical illness insurance.
New law makes it easier to make a successful insurance claim