Tinpot cover?

Critical illness insurance is an essential personal and business protection, given that whilst we are living longer we are also becoming ill more often.

Each year in the UK 320,000 people are newly diagnosed with cancer and well over 200,000 suffer a heart attack or a stroke.

Critical illness plans are constantly evolving and recent upgrades by several companies highlight why it is essential to use the services of a specialist protection adviser who can advise on the differences and subtleties.

Many consumers are unaware that the better critical illness plans automatically include payments for children diagnosed with one of the many conditions.

Typically a sum of up to £25,000 is payable if a child is diagnosed. Legal & General became the first insurer to introduce a payment if a child dies – in this instance £4,000. Furthermore they provide additional payments for parents’ accommodation and child-minding.

Skandia recently entered the market with an extremely high quality plan aimed at those consumers who accept that aiming for quality is a better target than focusing solely on cost. After all, if we purchased all items on cost alone we’d live in tents and buy rust-bucket cars.

Not to be outdone, Bright Grey extended its cancer cover by including early stage chronic lymphocytic leukaemia, a condition that other plans exclude.

Perhaps the most interesting development was the substantial upgrade engineered by LV=, a company better known as Liverpool Victoria. Rather than toy with their existing plan design they have introduced a number of innovations all designed to add value.

Upon diagnosis of a neurological condition – such as Motor Neurone Disease, Multiple System Atrophy and Parkinson’s disease – policyholders below age 45 will receive an additional 50% payment.

For other conditions such as blindness, loss of limb, third degree burns and traumatic head injury, LV= doubles the payment if caused by an accident. In both instances the additional payments are limited to £200,000.

Additionally, LV= has added three brand new partial payment conditions that pay up to £25,000, these are minor heart attack, minor stroke and non-severe cardiomyopathy.

Other lesser payments are made for less extensive third degree burns, hysterectomy due to carcinoma in situ of the cervix and a number of other conditions. Just as importantly they have amended their claim definition for benign brain tumour and are the only company to meet a claim purely on a diagnosis.

To many these adjustments may seem to be of little importance, but each one has an impact on whether a plan is able to meet a claim. The differences between the best plans that include over fifty critical conditions and the worst, which covers only five, are massive.

Would you buy a car with only three wheels, or a house without a roof? Buying a cheap and cheerful critical illness plan could have the same negative impact and similarly end up costing a fortune.