Summary
The compensations provided by life insurance policies are compared with the benefits of critical illness insurance cover. The reasons why it is advisable to sign up for critical illness cover now.
Think about this scenario ‘Could you pay your monthly bills, if illness prevented you from working?’ A large proportion of us would say ‘No’. So clearly we need to think about taking out insurance against unpredictable events. A normal critical illness policy would pay out a tax free lump sum if the policyholder is diagnosed with a potentially life threatening illness. The lump sum can be used in a number of ways. For example, you could simply settle your bills, pay off your mortgage or make alterations to your home to accommodate a wheelchair.
The coming months will see a big price rise, so if you haven’t got any insurance cover at the moment, now is the time to get insured. The cost of life cover has has lowered over the past 20 years. There are copious reasons why this has transpired. To start with the Aids epidemic, which was probable in 1980-1987 never occurred and secondly the recovery rate of those undergoing cancer and heart attacks has very much improved.
These factors have allowed insurance companies. Protection insurance is frequently re-evaluated by Insurance Companies, when the number of claims for certified illnesses are assessed. Following such a review Scottish Provident will be amending payments shortly, with the cost of life cover decreasing slightly and the premiums for critical illness insurance cover rising. The insurer is not able to say by how much, as the individual’s situation and the amount covered differ from customer to customer, but the increase should not be large is forecasting that there could be a rise of between 32 and fifty two per cent in critical illness cover payments over the coming months. It also suspects that guaranteed rates may either become too expensive for some people, or even come to an end owing to the volatile marketplace.
Swiss Re has said that it will not underwrite critical illness insurance policies from the end of December as the policies are costing them too much.
The cost of cover has been put up by 2 of the largest high street insurance companies. A twenty to twenty five per cent rise has recently been broadcast by Scottish Equitable and Prudential. On the other hand this is small potatoes compared to the incredible price increases written into the policies now available from PPP and Standard Health Care, which differ between 40 to 50 per cent.
It is presumed that this movement will be followed by other re-insurers. Fixed monthly preiums where the monthly price is held for a precise length of time, typically twelve years, may no longer be given by insurers Insurance Companies. From now on, payments will be re-assessed each year, just like car insurance, home insurance and life insurance cover. The outlay for the customer will be much larger in the long term. The implication is clear. Critical illness Insurance is getting more costly so sign up now to benefit from guaranteed premiums and the moderately cheap life cover premiums being given at the present time. Let us pray that you never have to make a claim, but data indicates that sadly more and more of us will.
