Confusing, isn't it? Despite all the different names, insurance policies are all there to protect you. Some insurance products are designed to help when things go wrong, like payment protection which will cover your credit payment commitments when your earnings fall or stop. You make payments in the form of premiums and in return you have the assurance that, whatever else, your financial worries will be addressed. Other products are designed to put your house in order when the inevitable happens.



Car Insurance, house insurance and critical illness insurance are in the first category. Hopefully, with the latter, having taken this invaluable cover out, you'll never have any need to make a claim on it.

The life-threatening diseases and conditions covered by critical illness policies are the familiar ones of cancer, stroke, heart attack, kidney failure, major organ transplant, multiple sclerosis and coronary artery by-pass surgery. These are what are known as the “core” conditions. Increasingly there are policies that will cover other conditions too. All conditions should be clearly listed in the policy document. If you are diagnosed with any of these conditions you will receive a lump sum payment.

There may be some sort of exclusion within the range of conditions. Some cancers, caught and treated at an early stage, usually by screening techniques, are not in the life-threatening category and may not be covered. If initial treatment was unsuccessful and the condition developed severely, then the cover would apply.

As far as the amount insured is concerned, at a minimum you should aim to be able to fully repay any loans as well as your mortgage. More cover on top of this could be used to cover day to day expenses. Up to date treatments mean that you have much more chance of surviving these critical illnesses but treatment and recovery can be prolonged. Sometimes a critical illness can mean a different lifestyle, with possibly a change of career, home and car being needed, in addition to help within the home or with the family. Make sure you take out sufficient cover to keep everything up and running until your recovery is complete. A diagnosis of leukaemia could involve up to two years of treatment and even then a return to full time employment may well be a gradual process.

It is critically important that you are completely honest and open when filling in your application form for critical illness cover. Leave nothing out. If you do, you could inadvertently put your claim at risk. The first thing that will happen if you need to make a claim is that your insurance company will go through your medical records. If it is found that you have not disclosed information regarding past illnesses, diagnostic tests or operations then your claim may be at risk. The illness that you are making the claim for doesn't have be connected with the illness or test that you have omitted from your information, nor does it have to be what you would class as serious.

Companies vary in their claim rejection rates, with one leading insurer rejecting as many as 30% of claims simply because of non-disclosure of information on the original application form. With payment protection policies there are likely to be a number limitations which need to be carefully considered before signing up.

Critical illness insurance costs will vary according to your individual circumstances. Previous medical history will obviously come into the calculation as well as your age and amount insured.

Contact an on-line broker for a range of quotes – you'll get all the help you need and they'll offer you a range of options at the best possible price.