Everyone gets sick from time to time. In fact, the statistics are quite alarming. One in four men and one in five women will become seriously ill before they reach 65.
While we are living longer for many of us a serious illness could change life forever which is why it’s so important to make provision for such an event. Coping with a serious illness is a challenge enough in itself, but for most people life and living must go on. There will be mortgages or rent to be paid, children to be sent to school, groceries to be bought and often lifestyle adaptations to be made and paid for. You might need to take time off work to undergo treatment, to convalesce or to allow time for rehabilitation. Indeed, a serious or progressive illness may mean that you would be unable to return to your job or even to the workforce. Perhaps you would be able to live on your savings, that’s if you’ve been careful enough to put away a substantial amount of money for just such an event. There is limited State assistance available for those suffering a serious illness, but the levels of financial assistance are unlikely to be enough to support even the most basic of modern lifestyles, especially if you have dependents or children.
No amount of money will make up for suffering a serious illness. However, with a bit of prudent planning, you won’t have to worry about money while you are getting back on your feet.
Specified illness protection covers the following illnesses: Cancer, Emphysema, Heart Attack, Blindness Stroke leaving permanent damage, Paralysis, Multiple Sclerosis, Kidney Failure, Muscular Dystrophy, Loss of Hearing, Motor Neuron Disease, Chronic Liver Disease, Rheumatoid Arthritis, and Benign Brain Tumours.
With Specified Illness Cover in place, upon diagnosis and acceptance of your claim you will receive a cash lump sum which you can use however you wish. You could use it to address your most immediate financial responsibilities, such as paying off a mortgage to secure your family home for you and your loved ones, or discharging any outstanding debts such as personal loans, car loans or credit card balances. Measures like these can take a financial weight off your mind and give you the time and energy you need to focus on the treatment of your illness. You could also choose to use the lump sum to cover your ongoing living costs such as mortgage, rent and other typical lifestyle outgoings. Much depends on the nature and progression of your illness, but the point is that the choice is entirely yours.
Not all Specified Illness Cover is the same, however. Not only does the list of specified illnesses vary from provider to provider, but so too do the benefits and premiums that apply to the level of cover you might be looking for. Just as important to note is that the lists are very specific, hence the name of the cover, and you do need to read exactly what is and what is not covered. None of this is to catch consumers out or for providers to avoid paying claims. It is simply so that the cover will protect those whose lifestyles are under greatest threat and to make the cover more affordable for a wider range of people.
Specified Illness Cover (also known as critical illness or serious illness) is a type of insurance which pays out a tax-free lump sum if you are diagnosed with any of a set of specific, often life-threatening illnesses. You pay a monthly premium based on your health, your lifestyle and the level of benefits you want.
If you are diagnosed with one of a specific set of serious illnesses or disabilities, your policy would pay you a tax-free lump sum. This could be used to cover your financial commitments: mortgage/rent, utility bills, education, insurance and living expenses. The lump sum takes a financial weight off your mind and gives you time and energy to focus on the treatment of your illness.
No. Each product in the market comes with its own list of up to 40 or 50 specific illnesses and disabilities. Some illnesses are included on most policies, including multiple sclerosis, motor neurone disease, coronary artery disease and aggressive forms of cancer. Many common illnesses are not covered, such as angina, mild stroke, back problems and non-aggressive cancers. Some policies offer a partial payment for illnesses such as breast or prostate cancer. But every product is different and it’s important to check the full terms and conditions of each when considering your options.
You may qualify for State Disability Benefit but the amount of this benefit is limited and highly unlikely to support your lifestyle.
If, as most people do, you survive your illness long after your initial diagnosis has taken place, there is absolutely no requirement that you return any or all of the lump sum you receive.
There are a number of different Specified Illness Cover products on the Irish market, some of which may or may not suit your needs. The list of illnesses, disabilities and benefits can differ significantly between one product and another. We can give you advice on what form of Specified Illness Cover is best suited to your needs and advise you on tailoring your cover to your budget and circumstances.
There is no perfect answer to that, it really depends on the individual or the individuals that you are dealing with. And so what I would encourage people to do is try to have a level of critical illness that would pay off all short term debt and give them 3/5 years of income. Ideally, you should have a level of critical illness that would pay off your mortgage, short term debt and give you a number of years of income but this may prove to be very expensive.
Yes, serious illness/critical illness should always form part of financial planning to protect you and your family.
The 4 main critical illnesses are heard attack, cancer, stroke, and multiple sclerosis.
Yes, serious illness and critical illness are the same.
Yes, there is a cover called accelerated serious illness cover. For example, you have €200,000 life cover and €50,000 accelerated critical illness in the same plan. If you claim on the critical illness, the €50,000 euros paid out would then reduce the €200,000 life cover by €50,000. So your life coverage would reduce down to €150,000.
Again, that’s very subjective to the person or persons that you are dealing with. If it’s somebody with no dependents or they do not have anybody financially dependent upon them, there is no need for life cover. However, if you have dependents ( children/spouse ) who are financially dependent on you, then you should definitely have life cover. The amount of life cover would depend on a number of factors i.e. how many children you have, ages of the children, short/long term debt outstanding but to mention a few!
Not automatically. However, you can add critical illness as part of your mortgage protection policy.
Our initial answer would be it is better to have bought but in the event that you know bought are not affordable, it is really subjective. And so there is no right or wrong answer. It would really be a personal decision.
It depends on the illness being claimed for and how much medical information that is there or whether you are awaiting further medical results. Typically, if all of the information is available and it’s very straightforward, you are looking at probably four to six weeks. However, it may take a couple of months depending on medical information required.
In the event that you get diagnosed with a Critical Illness i.e heart attack, cancer, stroke. And that your claim is successful, a lump sum pay out is made to you. So it allows you to pay off any short term debt, pay for day to day living expenses without having to worry about money as you are on the road to recovery.
Income protection pays out indefinitely up to the age of 65 normally. But again, if you make a claim on income protection and you are out of work for 12 months, and after 12 months, you can return to work, then the pay out will stop. But in the event that you’re not able to return to work, it will pay off until the age of 65.
Financial Planning Standards Board
Certified Financial Planner