Answered by Daniel Pay
What’s the difference between the two types of insurance?
It is easy to get confused between ‘critical’ and ‘terminal’ illness, however it is imperative to understand how to differentiate between them when looking into various policies.
Critical Illness Insurance
‘Critical Illness’ is a policy that pays a lump sum if you were to be diagnosed with one of the listened illnesses covered on the policy and is usually bolted on to a Life Insurance policy which pays out on death.
This sum is usually used to pay for private medical care and to make home adjustments if a critical illness has been suffered, or to pay off the remaining balance of a mortgage.
Terminal Illness Insurance
‘Terminal illness’ is usually included in most Life Insurance policies as standard, and only pays out if you have been diagnosed with an illness where a specialist has given you a life expectancy of less than 12 months.
Given this the difference between terminal illness and critical illness is fundamental as you are far more likely to suffer a critical illness that is not necessarily terminal.
For example, a stroke could leave you incapable of working ever again but this wouldn’t invoke a terminal illness payout unless the consultant thought you would pass away within 12 months.
Furthermore, critical illness plans also cover some serious physical disabilities, such as the loss of limbs or eyesight.
Speak to an expert
Feel free to pop us a call on 01273 646 484 to run through with an adviser if you would like to find out more.
Frequently Asked Critical Illness Insurance Questions
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