What is critical illness cover?
Critical illness cover is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy. The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.
The policy may require the policyholder to survive a minimum number of days from when the illness was first diagnosed. The survival period used varies from company to company as does the list of illnesses covered for. Mostly these policies would be used to cover a potential loss of earnings from being off work for a prolonged period of time.
What is TPD?
Total permanent disability would cover you in the event that you became unable to perform your employment function due to a disability. Most commonly this would be due to physical damage sustained in an accident.
What policy and how much cover do I need?
Each person has different requirements and many factors should be considered including age, current liabilities, children and wealth.
A life insurance policy should cover all debts and future foreseeable expenses for your family.
Critical illness as a rule of thumb should be covered for an amount equaling a minimum of 6 months living expenses. Typically after 6 months you will either be back at work in some capacity or your life insurance will be paying out.
If you need critical illness cover or TPD, get in touch with us to find out more about the available options.