Life and Critical Illness Insurance

This is an insurance that most of us have heard of, and if you haven't, you could hazard a guess at what it covers, but what is the difference between the two?

Critical Illness Insurance

Critical illness Insurance is designed to pay out a lump sum and provide financial protection if a policy holder is diagnosed with a certain illness/medical condition.

Once diagnosed with an insured condition the policy pays out a tax free lump sum which can be used by you and the family.

The list of uses is endless, for example:

The conditions can differ from insurer but all policies will cover*:

*Provided they are at a certain severity.

Life Insurance

Term life insurance gives you cover for a pre agreed period, it can be a sole or joint policy and is designed to provide a lump sum in death of the sole insured or the first death of a policy holder for joint policies.

The monthly premium can be affected by, your age, health, period of cover and other factors such as whether you smoke or not.

The insured amount can be set for the duration of the policy, it can decrease throughout the policy term, or it and the premiums can increase throughout the term to keep in line with inflation.

The lump sum can be used by the family as they see fit e.g. to repay outstanding mortgages or other loans.

• to pay for specific treatment not available on the NHS

• to repay a mortgage or other bills as your income has reduced as a result of the diagnosis

• to pay for a once in a lifetime holiday

• cancer

• heart attack

• stroke