Critical Illness Cover Payout
Of course, when it comes to buying insurance cover for anything, we’re all different and that means to ensure the best chance of receiving a payout if the worst happens, it makes sense to seek expert advice. If you want to find out a little bit more about critical illness cover payouts this article will help.
In it, we’ll discuss:
When does it pay out?
Critical illness cover provides financial protection if you are diagnosed with a critical illness that stops you, or limits your ability to work. It pays out a lump sum to be used for numerous things. For example, to pay off your mortgage, replace lost income, ensure your family/dependents are looked after financially, or to pay for private medical treatment.
When you’re considering taking out critical illness cover which requires payment of regular monthly or annual premiums, the payout rates (i.e. the likelihood of being able to make a claim) can be an important part of your decision process.
That means it won’t necessarily payout if you’re diagnosed with a terminal illness that will shorten your life expectancy – although in some cases it will. But, critical illness cover will payout if you get an illness that you may recover from, with the right treatment. Each policy will differ slightly depending on the insurer you use.
However, the list of illnesses critical illness cover is designed for, and will most likely payout on, typically includes:
- Heart attack
- Multiple Sclerosis
- Benign brain tumour
- Coronary artery bypass
- Heart valve replacement
- Early-onset Alzheimers
This isn’t an exhaustive list, but in many cases, if you receive a diagnosis of one of these illnesses, then provided you fully disclosed all your details when taking out your policy, you should receive your critical illness cover payout.
Why might my critical illness cover not payout?
Situations, where your critical illness cover might not payout, can include:
- Where you didn’t fill out your initial paperwork correctly
- If you failed to declare an existing illness, that could be considered a contributing factor to the critical illness diagnosis, when you took out the policy
Whenever you take out an insurance policy, such as critical illness cover, seeking expert advice from qualified and experienced professionals, like those we work with, can be the difference between buying the right insurance and receiving a payout if required and having your claim refused due to a minor mistake in the initial application process.
How much does it payout?
How much your critical illness cover will payout if you’re diagnosed with an illness that’s covered by your policy, depends on how much cover you took out.
Many people take critical illness cover to ensure they can pay for larger and important costs, such as a mortgage.
That means that if you took your critical illness cover out when you bought your home, you might have taken out a policy that covers the entire mortgage. Therefore, your successful claim should payout that amount, meaning the mortgage should be paid off in full.
There are other situations, however, where a smaller payout may be made, due to a variety of factors, including if the illness isn’t considered as severe or debilitating as others. Or, if you use your policy to pay for treatment of a child who falls critically ill, assuming your policy includes critical illness cover for children, as not all do.
What is the average critical illness cover payout?
In many cases, critical illness cover claims are successful and the payout substantial. Figures from the Association of British Insurers (ABI) show that in 2017, 90% of critical illness cover claims were paid out, up from 84% in 2016.
In monetary terms, that was a total of over £1 billion, for an average critical illness cover payout of a little under £68,000 per individual successful claim.
To find out how much critical illness cover you need and to ensure you receive a payout in the event of a critical illness diagnosis, expert advice can help make sure you choose the right cover with the best insurer for your specific situation.
How do insurers make payouts?
If you’re diagnosed with a critical illness and your insurance claim is successful, expect to receive your payout as a single lump sum. How you use that money – to pay off your mortgage in its entirety or to cover regular monthly living costs over a period of time – is up to you.
But, once you receive that payout, your critical illness cover will be at an end. You are able to take out a new policy, but as before, it’s essential that you disclose everything the application requests, including previous claims. If you don’t, you could find any future claims are refused.
Speak with an expert today
If you’re considering your situation and think you might need critical illness cover, expert advice can help make sure you get the right policy for your needs. They can answer all your questions, including when does critical illness cover payout and average critical illness cover payout amounts.
To speak with a fully qualified and experienced critical illness cover advisor like those we work with, get in touch with us today on 0808 189 0463 or by filling in our enquiry form.