Financial Protection

Critical Illness

The statistical evidence of critical illnesses is frightening: -

  • 284,000 people in the UK wre diagnosed with cancer in 2004. There are over 41,000 new cases of breast cancer and 37,000 people new cases of lung cancer each year. These are the two most prevalent forms of  cancer in the UK. (Soruce: Cancer Research Website Sep 2006)
  • Around 280,000 people each year in the UK suffer a heart attack or, put another way, someone has a heart attack every 2 minutes. On top of this, on average 28,000 people each year undergo coronary artery surgery because of coronary heart disease. (Source: Health Insurance Guide Website Sep 2006)
  • 10,000 people under the age of 55 suffer a stroke each year – 1,000 of these occur under the age of 30. (Source: Different Strokes Website Sep 2006)

A critical illness policy is designed to pay primarily a lump sum in the event of you contracting any one of a whole range of critical illnesses. A good policy will cover at least 25 to 30 serious illnesses.

In the first instance, we would recommend this to be incorporated within mortgage protection planning. To ensure in such event that the mortgage liability has been taken care of is a primary concern.

In addition, we would recommend that further provision be made for personal benefit. Such additional cover may come into use for the purpose of: -

Retention of savings and preservation of lifestyle and current financial objectives, e.g. children’s education, wedding costs, holidays.

Funding early retirement or funding an income shortfall or childcare costs resulting from an enforced change of occupation

Facilitating private medical attention or covering none NHS funded treatments

Covering the cost of a spouse giving up full time work to go part time
or giving up altogether to care for their spouse

Covering the cost of moving home or making adaptations to the existing home

Some people may question that income protection and critical illness are in essence covering the same issue. There is admittedly some degree of overlap, and, in the event that both insurances are effected, it could indeed result in more than one claim. However, there does remain a significant variation in the causes of claims. Two key areas of claims for income protection are Musculo-skeletol Disorders and Nervous Disorders. It is likely that in the majority of occasions, these conditions would not give rise to a claim under a critical illness policy.

Also remember that critical illness principally provides a capital sum, which suits situations where income is inappropriate.

For some further information regarding critical illness, please see the attached documents available from the Association of British Insurers (ABI) website - www.abi.org.uk
Independent Financial Planning Services
Mortgages/Finance
Financial Protection
Income Protection
Life Assurance
Critical Illness
Key Person Assurance
Partnership/Director Shareholder Protection
Retirement Planning
Personal Investments
Company Investments
Downloadable Literature / Guides
 

Warr & Co is regulated in the conduct of all financial planning business activities by the Financial Services Authority. Our website is a regulated business territory site. Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific financial advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading this. If you would like to discuss any of the points raised and / or engage our services in providing independent financial advice specific to your personal circumstances, please feel free to contact Jeff Crewdson, Steve Prosser or Chris Raggett on 0161 477 6789 or email us at finserve@warr.co.uk.