The ongoing cost-of-living crisis has undoubtedly presented many of us with a seemingly contradictory dilemma.
On one hand, you might be wondering whether you would be best off cancelling any protection insurance policy you presently hold, in order to save money in the short term. Or perhaps the circumstances of the moment actually make some kind of protection cover more important than ever for you and your family?
In theory, one way of resolving this question could be to commit to a protection insurance policy, at the same time as doing everything possible to minimise your premiums. So, if it is critical illness insurance that you are presently in the market for, what could you do to achieve that?
Firstly... consider how much critical illness cover you genuinely need
Before we go any further, let’s remind ourselves precisely what critical illness cover is. It is a type of protection policy that pays out a one-off tax-free lump sum in the event of the policyholder being diagnosed with a serious illness such as cancer, or being rendered permanently disabled as a consequence of injury.
This makes it quite different to, for example, life insurance, which is all about leaving something behind for your family after your death. However, the two types of policy do have some things in common; for example, like life insurance, critical illness policies can also often pay out in the event of the policyholder’s death, if a claim is not made while the policyholder is still alive.
Of course, the fact that critical illness cover can pay out when the policyholder has merely been diagnosed with a certain illness, and has not yet passed away, is one of the key attractions of this kind of policy for many people. Technically, a life insurance policy might also pay out while you are still alive, but only if you are terminally ill with less than a year to live.
Critical illness insurance, then, can greatly help you and your household avoid financial hardship while you are still alive - bearing in mind the potential medical bills, and how serious illness may stop you from working to earn an income.
So, bearing all the above in mind, it is important to ask yourself exactly what expenses of yours you might be looking to cover with a critical illness insurance policy. This, in turn, can help you avoid taking out a critical illness policy that costs more than is strictly necessary.
Not only the aforementioned medical expenses, but also such costs as your mortgage or rent payments, any loans you are currently paying off, childcare costs, and other regular bills such as water, gas and electricity, could all be paid for using the money you receive from a critical illness cover payout.
And of course, people can drastically differ in terms of the level of costs they have, and their level of vulnerability to those costs. A person who has many thousands of pounds of savings, for example, might have the luxury of arranging a lower amount of critical illness cover than someone who has no savings at all.
But on the other hand, if you are older or have existing health problems, you will be considered by insurers to present a higher risk than someone who is younger and does not have any history of health issues. These factors could bump up your critical illness insurance premiums without you being able to do much about it; nonetheless, they are important to think about.
Don’t be fooled by suspiciously low premiums for critical illness cover!
We’re sure you will be familiar with the concept that something that looks too good to be true, probably very much is. And yes, that can be a principle that applies to critical illness insurance, too.
Of course, we’re not suggesting you shouldn’t try to snap up a great deal on your critical illness cover if you see one. But if a certain plan does seem to offer very low premiums, it is important to make sure this isn’t the case due to the insurer having a low probability of paying out.
You might not have known that insurance companies are obliged to provide this kind of information publicly. So, don’t hesitate to pore over the given insurer’s data, so that you can be sure you are getting the attractive deal you initially thought you saw when you first set your eyes upon the price.
There you have it - a quick rundown of some of the things you can do to slash how much you pay for critical illness insurance during a cost-of-living crisis, without necessarily putting the level of protection that you need at risk.
Would you still appreciate receiving further tailored advice from qualified experts? If so, you are very welcome to call our no-obligation quotation line today, on 0800 316 6917.