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.

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Ian Marsh, a Director of investments at Brighton-based financial adviser Peel Townsend Financial Services, warns that it is very irresponsible of people not to have Life Cover and/or Critical Illness Insurance as he maintains that life has 2 main dangers – either being alive too long and passing away too early.  “Its imperative to have some insurance in place – especially if you have got young children,” he states. “These days you must construct your own little welfare state because nobody else is can do it for you.”

Justin Peters at LifeSearch says now is the right time to buy such plans as there are some very reasonable premiums about owing to the fierce competition for business within the market. “The cost of life insurance has fallen – dropping about forty per cent in four years. It has never been so cheap,” he states. “The critical illness insurance market paid out on 85 per cent of claims in 2006 – increasing from eighty per cent  the during the last year.”

Be aware of what insurance cover you already have before you take out any more.  Do you already have investment policies or does your company pension plan give you any cover?

The best way to calculate how much insurance you will need is to work out how much you would need to have the same level of living over a year and then times it by 24 years.  The minimum amount required should clear all outstanding debts and provide a lump sum for all your dependants.

Make sure you get a really good deal

When making a decision on your insurance policy it is very important to read the manual that many insurance companies have of the conditions and illnesses that they deal with. It will catalog everything and should be strsightforward and simple to grasp.  You will also want to review the documentation of the crutial features of the policy which will take account of all exclusions and benefits.

When people take on the responsibility of a homeowner loan they are usually advised to take out critical illness insurance but should research the market and not just take the first insurance policy proposed.

If you start paying these premiums when you are younger they are a great deal cheaper, distinctly different to leaving it until you are older, when cover increases quite markedly.

Insurance payments can also be lowered by quitting smoking cigarettes.  April Holmes, manager of protection insurance at Thisismoney says ” as well as giving a longer and healthier quality of life, giving up smoking can save people a vast amount of money.”

If you quit smoking you can knock as much as a 1/3rd off life, critical illness cover and income protection insurance premiums because the evidence that we now have proves that smoking can trigger serious illness and intensifies any other existing health conditions.

If your circumstances change you may have to alter your policy.

Under no circumstances think that once you have bought your insurance policy that you can just carry on with your life and forget about it. constantly be very aware of the insurance policy you have and ensure that, should your circumstances alter, or, is about to alter your policy must accommodate these revisions.  Perceivable examples are moving jobs, or or maybe you would like to have more children; often think about everything that may put up your living expenses and would need to be covered if you cannot work.

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