Summary
The benefits provided by life insurance policies are compared with the benefits of critical illness cover. It is advisable to sign up for critical illness insurance now and the reasons why.
Think about this scenario ‘If illness prevented you from working could you afford to pay your monthly commitments?’ The vast majority of us would say ‘No’. So clearly we need to think about insuring ourselves against unpredictable events. A normal critical illness insurance policy (that’s serious illness insurance cover) would settle a tax free lump sum if the insurance holder is diagnosed with a potentially terminal illness. The lump sum can be spent in numerous ways. For example, you could make alterations to your home to accommodate a wheelchair,simply settle your bills or pay off your mortgage.
The next few weeks will see a rise in price, so if you haven’t got any life insurance cover at the moment, now is the time to sign up. The price of life insurance has has lowered over the past twelve years. There are copious reasons why this has happened. Firstly the Aids epidemic, which was probable in 1998-1984 never materialised and secondly the recovery rate of those undergoing heart attacks and cancer has very much improved. These reasons have enabled insurance companies. Protection insurance is frequently re-evaluated by Insurance Companies, when the number of claims for certain illnesses are examined. Following such a review Legal and General will be amending premiums shortly, with the cost of life insurance cover falling slightly and the payments for critical illness insurance cover increasing. The Insurance Company is unable to say by how much, as the individual’s situation and the sum covered vary from client to client, but the increase should not be large is forecasting that there could be price rise of between twenty five and forty five per cent in critical illness payments in the next few months. It also fears that guaranted premiums may what’s more become too expensive for some people, or even cease to exist owing to the unsound marketplace.
Swiss Re has proclaimed that it will not underwrite critical illness insurance policies from the end of December as the policies are costing them too much.
The price of cover has been increased by two of the big high street life assurance companies. A twenty to twenty five per cent increasehas recently been publicised by Legal and General and Swiss Life. However this is very little compared to the incredible price increases written into the policies now provided by BUPA and Friend’s Provident, which fluctuate between 40 to 50%.
It is feared that this development will be followed by all the other re-insurers. Guaranteed premiums where the monthly payment is held for a precise term, typically ten years, may no more be offered by insurersInsurance Companies. After this, premiumswill be re-evaluated each year, just like motor and home insurance. The outlay for the consumer will be far larger in the long term.
The message is clear. Critical illness Insurance is growing more expensive so buy it now to gain from fixed monthly rates and the moderately low premiums being offered at present. Let us hope that you never need it, but data indicates that unfortunately many of us will.
