As a Freelance Contractor you can experience various work-related pressures that can take a serious toll on your health. Such lifestyle related illness could have a profound impact on your financial situation.
“Critical Illness Insurance pays out a lump sum if you are diagnosed with any of a range of serious conditions, which include cancer, heart disease, strokes and multiple sclerosis.“
Did you know…
- Over 50% of all critical illness claims made in 2007 relate to cancer.
- The most common age of a claimant in 2007 was 45 and 71% of all claimants are aged 50 or under.
- Around 8000 women under 50 are diagnosed with breast cancer each year in the UK.
- The most common cause of cancer for men aged between 20-39 is testicular cancer.
Since launch of Critical Illness Cover (CIC) in 1983, the product has developed in various guises around the world. In the UK it has become a well established form of insurance that has paid around £1.6bn in claims between 2000 and 2005 alone.
But the brand has suffered having been dogged with stories of declined claims and rising premiums.
Some feel that Critical Illness Cover was flawed in its design from the start as traditional policies do not cover everything that should warrant a pay out and cover ceases after a claim. Sometimes policyholders are very ill but won’t receive anything because they don’t have the right kind of illness, or if they do sometimes it isn’t serious enough.
Medical science will always improve as will detection techniques and life expectancy. We are therefore more likely to suffer from repeat and subsequent events. In fact half of all heart attacks are repeat attacks.
In the 1970s, only 3 in 10 newly diagnosed prostate cancer patients survived beyond five years. Now it is 7 in 10. In 1971 only 52% of women suffering breast cancer survived for more than 5 years. By 2001 it was 81%, while 20% of men and 30% of women will suffer a second heart attack within 6 years.
The creator of Critical Illness Cover once said that the mistake our industry made was not to link the pay-out to the severity of the condition. Taking loss of sight as an example, the standard CIC definition in the UK is permanent and irreversible loss of sight in both eyes, which rules out any payment for tunnel vision, central blindness, visual impairment, loss of sight in one eye or a detached retina.
Some companies already recognise that some conditions, such as early stage cancers, warrant a partial claim instead of nothing at all - and from here on the concept of paying multiple claims for subsequent and repeat events is clear. If a condition worsens or if a new illness is diagnosed further claims can be made.
That’s why it’s important to consider “Serious Illness Cover”. Whereas traditional critical illness policies pay out only once, Serious Illness could pay out more than once if you suffer another unrelated or progressive illness.
We all buy car and home insurance every day. Do we get enough money to buy a new car if the window screen cracks? Do we receive enough money for a new house if the bath overflows? And are we refused insurance after making one claim? No, so why should Critical Illness Cover be any different.
For more information on this cover, please do not hesitate to contact us at Freelancer Financials.
Tags: Critical Illness Cover, Income Protection, Serious Illness Cover