Summary
The rewards provided by life insurance cover are balanced with the benefits of critical illness insurance cover. The reasons why it is advisable to sign up for critical illness cover now.
Ask yourself this question Could you afford to pay your monthly financial commitments if illness prevented you from working? Many of us would say No. So clearly we need to consider insuring ourselves against the worst happening.
A standard critical illness insurance policy would pay out a tax free lump sum if the insurance policy holder is diagnosed with a potentially life threatening illness. The lump sum can be used in any amount of ways. For instance, you could make alterations to your home to accommodate a wheelchair,simply settle your bills or pay off your mortgage.
The next few weeks will see a rise in price, so if you don’t have cover at the moment, now is the time to get covered. The cost of life insurance has has lowered over the past 12 years. There are a number of reasons why this has occurred. First of all the Aids epidemic, that was probable in 1980-1987 never occurred and secondly the survival rate of those undergoing cancer and heart attacks has significantly improved. These factors have enabled insurance companies to diminish premiums.
The opposite is factual for critical illness policies where the number of customers claiming has risen significantly recently and as a result premiums have risen. Protection is regularly reassessed by insurers, when the number of claims for certain illnesses are assessed.
Following such a review AXA will be amending payments shortly, with the price of life insurance decreasing slightly and the payments for critical illness cover going up. The Insurance Company is powerless to say by how much, as the client’s situation and the amount insured for vary from client to client, but the increase should not be massive.
On the other hand Moneysupermarket is predicting that there could be price rise of between 30 and 50 per cent in critical illness payments over the coming months. It also suspects that guaranted premiums may also become unaffordable for many, or even die away owing to the unstable marketplace.
Swiss Re has proclaimed that it will no longer underwrite critical illness policies from the end of the year as the policies are costing them too much.
The price of cover has been increased by two of the big high street insurance companies. A thirty to thirty five per cent increasehas recently been declared by Legal and General and Swiss Life. On the other hand this is small beer compared to the incredible price increases written into the insurances now offered by Friends Provident and BUPA, which range between forty to fifty per cent.
It is plain that this development will be followed by other re-insurers. Guaranteed premiums where the monthly price is held for a precise term, usually ten years, may no longer be offered by Insurance Companies.
After this, premiumswill be re-evaluated each year, just like car and home and contents insurance. The outlay for the consumer will be much larger in the long term. The implication is crystal clear. life insurance is growing more pricey so purchase it now to benefit from guaranteed rates and the relatively low prices being givenat the present time. Let us wish that you never have to make a claim, but statistics indicate that more and more of us will.