Life insurance on its own is a policy that pays out on death only. Some companies will also attach terminal illness cover. Do not get this confused with critical illness. Terminal illness is not a critical illness. Payments can be made on the diagnosis of a terminal illness, which mean the life assured can use the money for the life insurance before they die. It’s important to check the terms of the terminal illness as some do vary. You can always check these details on the key facts document supplied by the advisor.
Many people will look at taking out a life insurance policy with critical illness. Often many insurance companies will not offer critical illness without a life insurance policy attached. When taking out a standalone critical illness policy most people will either already have another life insurance elsewhere or are taking out a separate life insurance policy. The advantages of separating the two coverers are that it doubles the amount of a pay-out you and or your estate will receive.
Life & critical illness policies are attached to one sum assured. If there is a claim for life critical illness you are unable to then claim again for death.
This doesn’t always work for people as they have different reasons for the life insurance to the critical illness cover. Life insurance may be needed to help the family survive after the death of the life assured. It may be that the life insurance is being used to pay inheritance tax or other debts such as a mortgage. These are the main reasons why someone might decide to separate the life and critical illness. So although its often cheaper to take out a joint life and critical illness policy it may not always be the best thing to do. Feel free to speak to our qualified financial advisors who will be happy to help you decide which way is best for you and your family.