Having insurance is important to help you through unexpected life events. From home insurance, to vehicle insurance and medical aid, these products offer financial assistance when life knocks you down. Critical illness cover is no different. This product is developed to offer financial reassurance should a life-changing health issue (mainly illness) impact you and your family.
Momentum explained: “Critical illness cover offers financial protection against illnesses such as a heart attack, cancer, stroke, Alzheimer’s and Parkinson’s. It also covers injuries from accidents such as paraplegia, major burns and brain damage. It pays out a tax-free lump sum you can use in any way you like.”
Liberty noted that its Lifestyle Protector product “provides financial security as it pays out a cash lump sum if you suffer a critical illness or traumatic health event.”
Why should you have critical illness cover?
When asked when people should take out cover, Liberty noted: “What we are seeing from our claims history is that people should be taking out critical illness cover in their 30’s. However it depends on an individual’s circumstances, for example family medical history. You can never start too early in protecting yourself financially against the impact of a critical illness.”
Furthermore, Liberty stated that it is very important to have critical illness cover to assist with lifestyle adjustments that may be required as a result of the illness. “In addition to medical expenses, there will usually be other financial needs including special equipment or treatment and loss of income to deal with. Such expenses may be covered by the proceeds from a critical illness benefit.”
According to Momentum, critical illness benefits can provide additional funds for the following:
- To help offset any shortfall on your medical aid.
- For additional expenses or reduced income because of lifestyle changes.
- To access the best medical technology - something that medical aids can’t always offer.
What is covered?
Liberty noted that they cover most serious illnesses (cancer, strokes and heart attacks) where there is an impact residually, as a result of the illness. In addition, they also have a “catch all” benefit for those severe conditions that may not be covered under a particular category, but would qualify as a result of their impairment caused by the illness.
In addition to this, the Liberty Lifestyle Protector brochure also notes that traumatic injuries, such as head and neck injuries, spinal injuries and coma, as well as paralysis are also covered under critical illness, which may not be the result of or caused by a serious illness. However, the extent of what is covered may differ according to your insurance provider, as well as the critical illness cover plan you choose to take out.
When do you need to issue a claim against your critical illness cover, Liberty explained that it has a standard claimant statement for each of the defined categories that the claimant would need to complete.
“We also need a medical certificate completed by the treating doctor in all instances with all supporting medical evidence. Liberty may require additional medical reports regarding the claimant’s medical history and current condition,” clarified Liberty.
The difference between critical illness cover and income protection
There are a number of insurance products that aim to offer financial aid in the case of unforeseen life events. These include not only critical illness cover, but income protection and disability cover too. However, the scenarios under which these products will pay out claims differ.
Liberty revealed: “Income protection insurance will help you to protect yourself against losing your income due to an injury, illness or accident which prevents you from working. These payments will help to replace part or all of your income but it won’t help in meeting the additional lifestyle adjustment costs that suffering a critical illness might give rise to. The requirements to claim on income protection cover and critical illness cover are also normally very different and so there are many situations in which you might suffer a critical illness, but would not qualify to make a claim on your income protection cover. This means that the cover provided by Living Lifestyle and that provided by income protection insurance do not meet the same financial needs. To ensure that you have full financial protection to meet your needs, you would need to consider both income protection and critical illness protection cover.”
Before making a decision about the type of cover you take out, contact a qualified financial advisor who can advise on the best insurance cover to meet your particular needs.
Handy tip: You can apply for disability cover through Justmoney.