What Is Specified Illness Cover?
Specified illness cover is sometimes referred to as critical illness cover or serious illness cover, but they are essentially one and the same. It is a form of insurance that pays out a tax-free lump sum if you’re diagnosed with a serious illness during the term of your policy.
Specified illness cover can be purchased as standalone cover, or it can be combined with life cover on your mortgage protection or life insurance policy.
Standalone Specified Illness Cover
Standalone specified illness cover means that your cover is kept separate from any other life insurance policies you might have.
Accelerated & Additional Specified Illness Cover
Your specified illness cover can also be added to your mortgage protection or life insurance policy. It can be added as additional cover or accelerated cover, and while this might sound complicated, it’s really not.
- Say you buy €250,000 life insurance with €50,000 accelerated serious illness cover
- You make a successful serious illness claim
- €50,000 cash is paid out tax-free by your insurer
- Your life cover reduces by €50,000 to €200,000
- Your policy continues with €200,000 life cover. This amount would also be paid out if you were to die during the remainder of your policy
- Now, say you buy €250,000 life insurance with €50,000 additional serious illness cover
- You make a successful serious illness claim
- €50,000 cash is paid out tax-free by your insurer
- Your life cover remains at €250,000 as the serious illness cover was in addition to your life insurance
- Your policy continues with €250,000 life cover. This amount would also be paid out if you were to die during the remainder of your policy
What Illnesses Are Covered?
It is very important to note that not all serious illnesses will be covered by your policy.
Your policy’s terms and conditions will outline exactly what is covered and your insurer will only pay out if you’re diagnosed with one of the specific illnesses or disabilities listed.
Also, you usually won’t be covered if your illness is judged to be caused by drug or alcohol abuse, a self-inflicted injury or a failure to follow medical advice.
With some policies your condition would have to be extremely serious before you could make a claim and, in many cases, more common illnesses, such as back injury and treatable cancers, aren’t covered at all.
Do I Need Specified Illness Cover?
If you have a mortgage or other loans that would still need to be paid if you became ill and were unable to work, then you should consider getting cover. Likewise, if you have a family who relies on your income then it would be a good idea to have specified illness cover in place.
The maximum rate for Disability Allowance from the Department of Social Welfare is currently only €220 a week. For most people, if they were to become ill, relying solely on the State wouldn’t really be an option.
Do I Need to Undergo a Medical Examination to Take Out Specified Illness Cover?
If you’re in fairly good health then the answer is usually no.
However, if you have a history of illness, are over a certain age, or are applying for a large amount of cover then you may need to undergo a medical examination or complete an over-the-phone medical questionnaire, which will be organised and paid for by the life insurance company.
The life insurance company may also send a medical questionnaire to your doctor to be completed.
How Much Does Specified Illness Cover Cost?
Specified illness cover tends to be more expensive than other forms of insurance such as mortgage protection or life insurance as you don’t have to die before a benefit is paid out.
The exact cost of your policy will depend on several things such as:
- The amount of cover you choose
- The number of lives covered under the policy
- The term of the policy
- Your age
- Whether or not you smoke
- Your health, occupation and pastimes
- If you choose to add any additional benefits, as explained below.
Your first step is to contact us for a review. We will be able to help determine the appropriate level of cover for you.
You can call us on 064 6637393, email info@gallivanfinancial.ie or call into our office at Upper High Street, Killarney, Co. Kerry.
Once we’ve found the right policy for you, we will assist you in completing your application.