Information On Critical Illness

Building society interest rates can change rapidly and substantially. In two recent years (1973 and 1976) mortgage rates were hoisted respectively by over one-third and over one-fifth. Those who had stretched themselves financially to meet mortgage commitments found themselves in trouble. Whereas the repayment mortgage has some flexibility in this situation, the endowment mortgage has none. When the interest rate is raised, repayment borrowers usually have the option of extending the term of the mortgage rather than increasing their monthly payment (extending the term, say, from 25 to 30 years reduces the capital element in each repayment). But this option is not available to endowment borrowers. It makes no difference what the term of the loan is because they are paying only interest, and they cannot stop paying their critical illness insurance policy premiums as there would then be no cover for the loan.

Endowment borrowers who find themselves squeezed have only one, unpalatable, course of action, to convert their loan into a repayment mortgage of the same or slightly longer term, which will reduce the monthly payment. Surrender of the critical illness insurance policy will, as we have seen, produce a derisory return. It is worth remembering, therefore, that it is unwise to be fully committed on long-term loans to the maximum you can possibly afford.

Whether the full or low-cost endowment method is used, it is worth thinking about making the policy a joint one. This means that the sum assured is payable upon illness of either husband or wife. The additional premium required is normally less than the cost of a separate term assurance for the wife for the same sum assured.

Almost all insurance companies now have low-cost critical illness insurance schemes on the market. The main competitive thrust to date has involved the reduction in premium rates to make the schemes more competitive as compared with the repay­ment mortgage. Some plans even involve a reduced premium on the critical illness policy for the first few years and a higher one later, with a deferment (or reduction) in the investment benefits.

Before you decide to take out critical illness insurance, it is essential to know about various types of policies. Reading a particular critical illness insurance policy will allow you to discover the diseases for which insurance will cover you. It does not stop here. Every illness will have its different stipulation, so being knowledgeable can be of utmost help. Policies as well contain exclusions which are similarly equal in significance to know. Missing such details in your critical illness insurance plan will cause you not to understand your policy. Subsequently, the main problem will arise at the time when you will have to make a claim, where confusions will crop up between you and your insurers.

 As with any other insurance scheme, there are rules to follow when you take out critical illness insurance. Not abiding by certain policy laws can cause your claim to be rejected and you may consequently end up with no benefits at all. What will then be your main worries at that time? While your illness will cause your health to deteriorate, you will tend to think about how your family would cope to make both ends meet. For this reason, it is vital to read and understand the various guidelines found in your critical illness insurance policy. Request expert advice when necessary.

 Paying premiums on time is essential to keep your critical illness insurance scheme alive. Premiums can either be paid monthly or yearly depending upon the agreement you have made with your insurers at first. Missing premium payments can definitely lead to the cessation of your policy, resulting in your losing of precious benefits. Careful planning is therefore a must before you sign on some contract papers provided by an insurance company. Also, deciding upon the amount of cover you need, will enable you to know how much premiums you have to pay every month or year. You need to ensure that you are not overwhelmed with heavy premiums every month due to the choice of a high coverage amount.

If you select earlier critical illness benefit or simply critical illness benefit when you buy critical illness insurance, you can have the opportunity to take the buyback option. The buyback option will allow you to obtain further critical illness insurance should you happen to make a critical illness or TPD claim. In this case, your insurance company will have no other choice than to accept your claim and award you benefits. However, you have to be under the age of 60 to be eligible for the acceptance of a claim.

 In the past if you had claimed for heart attack and now wish to invoke the buyback option, your insurance company will have to perform a number of things. Firstly, your insurers will contact the concerned doctors and medical consultants who had treated you to request details of your medical status. As soon as your insurers receive the proof that 1 year has passed since you had been successfully treated with no signs of reappearance of any heart attack, they will prepare your buyback benefit. This option has to be taken inside 5 years of your claim being accepted by critical illness insurance. Selecting the buyback option with critical illness insurance can be an advantage.

Buy back is also known as reinstatement cover in some polices, different providers call things by different names so it is important to clarify exactly what it is you require from the policy that you choose and you do not mean something different to what is offered to you. Normally buy back or reinstatment covers a number of different illnesses but the list will not be as comprehensive at the original cover. It will normally exclude the illness that you suffered from in the first place to get the claim