Protection 

Why critical illness cover is worth it

This article is part of
Guide to Critical Illness cover

Why critical illness cover is worth it

Critical illness cover can be expensive - more so than basic income protection or life insurance.

For this reason, some advisers and clients have shied away from the cover, but most respondents to this guide suggest that while it may be expensive, critical illness cover (CIC) is worth paying for.

Chris Atkinson, head of innovation for Zurich UK Life, comments: "Is CIC worth it? In my opinion, it is worth every single penny.

"While CI may cost as much as a reasonable satellite TV monthly package, the true value witnessed when a claim is made is unparalleled against the pain of watching another series of X-Factor.

"Customers benefit from peace of mind, knowing that should they become seriously ill, they can focus on their recovery without having the extra stresses of financial worries, such as paying the bills and mortgage."

Alan Lakey, adviser for Highclere Financial Services and founder of the CI Expert, says: "Adding critical illness to a life assurance policy can make the premium four times more expensive, which is no surprise, given that statistically the risk of claiming is 400 per cent to 500 per cent more likely.

"The reality of a debilitating condition is that with loss of income, medical treatment, potential problems with mobility and maybe having someone to care for you, the financial cost exceeds that of dying.

"In this regard, it is definitely worth it."

Peter Le Beau, founder of Le Beau Visage, comments: "It (critical illness cover) is quite expensive. I'd say a significant percentage  more than life cover, but it can vary enormously by age and term. 

"It is very much worth it if you get to claim, but if you are ill you will need both capital and income, and then income tends to be the most important need. 

"It is certainly worth covering the mortgage with CIC - if you can afford it."

Value vs cost

Phil Jeynes, head of sales and marketing for UnderwriteMe, believes critical illness cover is not as expensive as people think.

"The difficulty here is, if a customer sees the price of life cover (which is very cheap) first, then adding CIC can increase the premium significantly, which adds to the individual's feeling they are being up-sold.

"The reality is the premium is higher because the insurer is far more likely to pay out on a claim, so it is absolutely worth it.

"As with all insurance the cost relates directly to the risk so if a premium seems high, it is almost always because your likelihood of receiving a payout is increased."

According to Mr Jeynes, this is where "cost must be separated from value". He explains: "We all recognise that with any purchase, we can buy at the cheap end, the expensive end or somewhere in the middle.

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