So, we are going to put it out there and just say straight away that insurance is boring. There is no ifs or buts about it, it can be a depressing subject. The products are complex and it is not exactly the highlight of anyones day to think about how our families will cope if we were to become critically ill.

We have put together a small quiz to try and put a bit of fun into the ins and outs of Critical Illness Cover. Each question has one correct answer, on your marks, get set, go!!

Question 1

Critical Illness Cover will pay out a claim:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: Upon the diagnosis of a critical illness covered by the policy at the specified severity set in the policy conditions.

It is important to understand that any claim that you place on your policy will be subject to the terms and definitions set by the insurer on the date that your policy came into effect. This will include the range of conditions covered, severity of the diagnosis required to make a claim and any exclusions that were placed on the policy.

Question 2

A typical Critical Illness policy will pay a claim out for:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: Heart attacks, strokes, multiple sclerosis and some forms of cancer.

Heart attacks, strokes, multiple sclerosis and cancer are all aspects of Critical Illness Contracts that are regulated by the Association of British Insurers. Many Critical Illness policies will provide full policy payouts for a minimum 40 conditions and a number of partial payment conditions.

Question 3

The amount of Critical Illness claims paid by Legal & General in 2014* was:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: £162.6 million.

It is often believed that insurers will do anything possible to avoid a payout for Critical Illness Cover. This is simply not true as the insurers do not want the bad press that this would generate. If you have been wholly truthful as to your circumstances on the date that your policy starts and meet the claim criteria you should receive a fully policy payout.

Question 4

The most comprehensive Serious Illness policy** on the market can pay a claim if you are diagnosed with one of:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: 166 medical conditions.

The VitalityLife comprehensive Serious Illness policy offers a staggering set of 166 claimable medical conditions. Claims are based upon the severity of a condition and payouts can range form 5% to 100% of the sum assured. Where a claim is less than 100% payment the policy can continue in the event that you were to be diagnosed with any further claimable conditions.

Question 5

You are how much more likely to suffer a serious illness during your life, than to die at a young age:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: 5 times.

One of the greatest concerns for many people today is that we are living much longer than we used to. This has resulted in an increase in the onset of more severe medical conditions as we get older; as mortality increases so does morbidity. Whilst this is true for those who are getting older it is also important to note that critical illnesses can occur to anyone at any age. A critical illness does not just need to be a genetic condition it may be the result of an accident at work or whilst out and about conducting our general life.

Question 6

You can use a Critical Illness benefit payout to:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: All of the above.

Once you make a successful critical illness claim the money is yours to do with as you like. We would recommend that you use the payment to initially settle any liabilities that you have and make changes to your lifestyle to accommodate your new health. It is also completely up to you if you decided to say 'Blow it, I'm off!' and go spend the benefit on some luxuries for yourself.

Question 7

To successfully make a claim on standalone Critical Illness Cover you must generally survive the diagnosis of your condition by:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: 14 days.

With a standalone Critical Illness policy you must survive the diagnosis for 14 days in order to be able to place a claim on the policy; some insurers extend this to a maximum of 30 days. This is why it is often recommended that you combine Critical Illness Cover with Life Insurance, as your next of kin will be able to place a death claim on the policy if you were not to live past this timeframe. The cost of a combined Life and Critical Illness policy is generally very similar to standalone Critical Illness Cover, so it is worthwhile asking your adviser to provide you quotations for both options.

Question 8

Critical Illness Cover and Income Protection are:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: complementary.

It may not be possible to have both Critical Illness Cover and Income Protection if your budget does not allow for both policy premiums. Income Protection provides a monthly income replacement to approximately 50-65% of your gross monthly income in the event that you become incapacitated. These payments may be restricted to two to five years, but often can be set to take you right up to retirement age for long-term income protection. Income Protection is ideal for those who want to ensure that they can maintain their standard of living if they are unable to work i.e. private education bills, quality food, general child expenses, etc. Critical Illness Cover provides an immediate lump-sum payment that can be used to address any immediate needs upon the diagnosis of a medical condition i.e. pay off mortgage, adapt home, buy adapted car, etc.

Question 9

Personal Critical Illness pay outs are usually:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: tax-free.

Pure protection Critical Illness Cover benefits are paid tax-free. This means that the sum assured that you are insured for is the amount that you will receive at the point of a successful claim. The amount will differ between inflation-linked, level and decreasing cover depending upon the terms that you established when you set up your cover.

Question 10

What percentage of Critical Illness claims actually pay out***:

A)
B)
C)
D)

Correct!

Wrong!

The correct answer is: Over 92%.

Critical Illness Cover has a high percentage of successful claims which has led to many families getting the essential funds that they need to cope with the life changes that come with severe medical conditions. Where claims are not successful this is often due to non-disclosure on the clients part when they originally placed their application for Critical Illness Cover (intentionally or not) or it can be because the medical diagnosis of the insured does not meet the policy claims definition. This is why it is so important to double check that your application is wholly truthful when you apply for any insurance and also for you to triple check your policy details so that you know exactly what you are and are not covered for.

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Well done for making it through the quiz. We hope that this has given you an initial understanding of what Critical Illness Cover has to offer and to dispel a few myths too!

If you would like to find out whether or not Critical Illness Cover is right for you and your circumstances then please feel free to speak with one of our industry trained advisers on 0800 567 7450.

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