May 31 is ‘No Tobacco Day’, which calls upon governments and individuals to recognise the dangers of tobacco and the illness it can cause. Of course, we all hope to avoid illness altogether, but if it does strike us, we want to make sure that our health problems are not compounded by concerns about money and our homes, and professional critical illness advice can help us make wise decisions.
After all, most households are reliant on at least one wage to pay the bills. If a wage earner is diagnosed with a critical illness that prevents them from working, the household will struggle to keep up with the bills. Critical illness insurance will protect you and your loved ones.
State help
If you suffer from a critical illness, you will be entitled to state benefits, but these may not be enough to fund the lifestyle that you are used to. Many employers will top up your benefits so that you receive a portion of your normal salary, but this will be discontinued after a few months.
Help with mortgage interest payments can come in the form of Support for Mortgage Interest (SMI). From April 2018, this will be paid as a loan that will have to be paid back, either from the sale of your house or when you return to work.
If you suffer long-term disability as a result of a critical illness, then you can claim various benefits including Employment and Support Allowance (ESA), Personal Independence Payments (PIP) and Disability Living Allowance (DLA). These benefits only pay modest amounts.
If you are off work for an extended period of time and have little in the way of savings, you could face serious financial hardship. The best critical illness advice is to insure yourself so that you and your family are protected if you are diagnosed with a serious illness.
What is critical illness insurance?
Critical illness insurance pays a tax-free lump sum if you are diagnosed with a specific critical illness. The amount paid depends on the level of cover.
The sum could help to pay the mortgage, but it can be used for any purpose. You can include your children on your policy, though they will receive a lesser sum than the policyholder. It is often cheaper to buy a critical illness policy at the same time as life insurance.
A critical illness policy has no cash value. If you die whilst the policy is still active, your relatives will not receive any money from the policy. It is advisable to also take out life insurance that will help your dependants if you die.
What is a critical illness?
A critical illness policy will specify the conditions that are defined as a critical illness. Some claims will be denied if the illness is not severe. For example, some forms of cancer are curable and will be exempted from critical illness cover. A mild stroke or heart attack that does not prevent you working could also be excluded, while some policies will pay a smaller amount for less severe illnesses.
How to buy critical illness insurance
Whether an illness is smoking-related or not, professional critical illness advice is invaluable, so talk to the experts at Ascot Mortgages.
