Choosing the right level of cover can sometimes be hard. Critical Illness cover can be fairly costly compared to life cover. The reason for this is because there is a higher chance of you being diagnosed with a critical illness over the next twenty or so years than passing away. This also of course means that it’s more useful to have.
If you are taking out critical illness cover to protect your mortgage, choosing the right amount of cover is fairly straightforward. To ensure your mortgage is paid off if you were to be diagnosed with a critical illness, your cover should match your mortgage debt.
If you have an interest-only mortgage, your mortgage debt stays the same throughout the term of the mortgage. Choosing a level term policy will ensure this debt is paid. If you have a repayment mortgage, your mortgage debt reduces over the term of the mortgage. A mortgage protection policy will reduce in line with your mortgage, so the cover amount you choose should match the current outstanding balance on your mortgage.
It's sometimes not possible to afford a policy to pay off the whole mortgage, and you may of course not even have a mortgage to protect! Many of our customers opt to have a smaller level of critical illness cover, for example two or three times their annual salary. A more affordable way of taking out critical illness cover is to take out a policy that pays an income each year rather than one big lump sum. You just need to choose how much cover you'd like to receive each year.
Whatever level of cover you decide upon, you will at least have the peace of mind that if you do have to claim, you’ll have some financial support should you wish to take a break from work, pay for private treatment or if you need to make some alterations to your home. Our advisers will be able to help you choose a suitable level of cover, so don't worry about having to decide this on your own!