A question our sales team often gets asked here at ActiveQuote is ‘Do I get critical illness cover with life insurance?’ It’s a good question as there’s a lot of confusion around the products, with many of our customers not entirely sure what the difference is or whether they need them.
Critical illness cover is a type of insurance that helps financially if you’re diagnosed with one of a number of predefined illnesses and conditions. If you were to receive such a diagnosis, it’s likely you’d need time off work for treatment and to recover. Your life might change permanently and going back to your existing job might not be an option. Having the right critical illness insurance in place would allow you to pay the mortgage or rent and the bills while you adjust.
Life insurance is designed to support your partner or dependents in the event of your death. As with critical illness cover, it’s paid out in the form of a tax-free sum and there are no stipulations as to how it can be used, so it could help, for example, to pay household bills or to cover the cost of raising children until they go to university or leave home.
It’s often assumed that life cover policies can only be taken out to insure the life of the breadwinner or the highest-earning partner, but this is far from the case. You don’t have to earn an income to be eligible for a life insurance policy; for example, in the event of an at-home parent passing away, their partner would most likely need financial support to take an extended break from work or pay for childcare or help at home.
When taking out either critical illness cover or life insurance, you will be asked how long you want the term to run. An example would be £50,000 of cover for a 25 year term; should you claim at any point within the 25 years, you (or your named beneficiaries in the case of life insurance) would receive a lump sum of £50,000.
Although they are separate products and available as stand-alone policies, many insurers offer critical illness cover and life insurance together, and it can often be cheaper to purchase them jointly. At ActiveQuote we work with our insurance partners in exactly this way; offering them individually or together depending on our customers’ own circumstances.
When you’re ready to compare life insurance quotes you will be asked if you also want critical illness cover and you can simply tick the ‘yes’ or ‘no’ box.
Critical illness also sometimes gets confused with income protection insurance, which is another type of insurance again. We have a range of easy-to-read guides outlining the different types of IP insurance, such as redundancy insurance, mortgage cover and loan protection insurance, so make yourself comfortable and have a read!