Considering the benefits of Critical Insurance Cover

In today’s society being debt-free is rare. Ensuring adequate cover to meet the demands of a credit-laden life is therefore essential. It’s common for practitioners to take out multiple policies to meet their requirements in times of adversity, with Life Assurance and Income Protection being two universal options. An alternative that should be considered is Critical Insurance (CI).

The essential element of any policy is to provide a basic level of income when unable to work and Income Protection will do this. However, CI will provide a tax-free lump sum of cash on the diagnosis of serious illness or permanent disability. This could be useful for those without an accumulation of assets as a safety net.

We are twice as likely to suffer a serious illness than die before the age of sixty. For a multitude of reasons, including the advances in medical sciences and technology, the survival rates for once fatal illnesses are much higher. A consequence of this is families contending with the unwelcome cost of treatment whilst having to meet daily financial commitments, often on a reduced income. For dentists this could also include the running costs of the practice.

There are two main types of policy available: Term (level) or Mortgage (decreasing). When considering CI, there are several factors involved. Firstly, there are your current mortgage commitments, for both the home and the practice. It is necessary to balance the current costs of living with the cost of providing financial cover when you are unable to work.

Secondly, although generally cheaper, a mortgage critical illness plan means the amount that can be paid out decreases over the course of the cover. In contrast, a level term critical illness cover payout remains constant throughout the life of the policy. The advantages for both types will require careful consideration.

At the outset, choosing the right provider of your cover is vital as there will be no option to change if your health deteriorated. One of the main areas for dentists to consider with critical illness policies is to make sure the wording on the small print covers you as a dentist. Very few insurance companies have the necessary “own occupation” that could be crucial in the event of a claim.

1 in 4 women and 1 in 5 men will suffer a serious illness before retirement age. Taking adequate measures to ensure that the recovery process is not hindered by worries about finance seems a prudent step.