Critical Illness

A serious or critical illness plan is designed to pay out a one-off lump sum if you suffer from one of a specific list of illnesses during the policy term.

This policy type will typically cover around 40 specific illnesses, but some companies cover more illnesses than others, so you must be very careful when selecting which life company to take your policy out with.

Cheaper is not necessarily better with this type of policy.

Why would I need it?

The lump sum that you receive could be used to either reduce your mortgage balance, remodel your home to make it wheelchair friendly if needed or provide your family with enough money to get by when you are not in a position to earn an income.

We feel it is a bit of a luxury product as it can be quite expensive, but it is worth including some element of serious illness in your protection planning. The unfortunate reality is that the chances of suffering a serious illness (such as cancer, heart attack or stroke) before age 65 is one in four for men and one in five for women.

Pricing

The cost of serious illness policies has increased over the last few years, making serious illness policies quite expensive for what you might get. That said, it only tends to be foolishly expensive when you want to cover your entire mortgage against a serious illness and also take out some extra cover. We feel a more sensible approach is to talk through cover with clients and to agree on for example covering half of the mortgage with serious illness cover or just agreeing on one useful lump sum amount like €100,000 of cover.