The importance of taking out life insurance is not something most will debate about. This coverage protects you and your loved ones’ future financial security. However, you may be wondering what is a critical illness policy and is it right for your family?
As a parent, the last thing you want to imagine is your loved ones getting diagnosed with a critical illness. But that doesn’t stamp out the possibility of that happening. Conditions like certain severities of heart attack, strokes and cancers do not respect age and can attack anyone, young or old alike. Certain child-related conditions can also be covered within a critical care policy such as Down Syndrome.
Without a financial protection plan in place, it can end up being very costly to look after a sick child who is going through treatment, even when the treatment itself may be free. Your child is your number one priority, and should they become unwell you want to make sure you can be there to hold their hand through the process. This may mean taking time off work to stay with them in hospital, look after them at home or travel to and from treatments.
Having a critical illness policy in place can help you to continue to pay your mortgage/rent and other financial liabilities while having time off work to focus on your child’s recovery.
Curious how this coverage works? Keep scrolling to find out!
What’s critical illness coverage for children?
Children’s critical illness coverage is a special policy paying out a lump sum to cushion your family financially if your child gets diagnosed with an acute condition covered in the policy. And no, it’s not only for biological children; insurers also cover legally adopted children, step-children, or others who are financially dependent on you.
You can include your children with most standard critical illness coverage policies. But first, you must check with your specific provider to confirm if it’s acceptable to add your child’s protection under the same policy. Plus, it comes with different terms you must be aware of.
In essence, the policy covers children from birth until they reach the age of 22, or finish full time education. And you can only claim once per child, with the payable support being around 50% of your critical illness coverage amount up to £50,000, these figures and ages may change though depending on who you are insured with.
Here’s an example;
Assuming you as the primary policyholder, have a critical illness coverage of £250,000, and your child’s coverage is 50% capped at £25,000. In this case, the policy will pay out a maximum benefit of £25,000 for your child’s illness and not 50% of your total coverage.
What critical child illnesses are covered?
The kinds of conditions covered in a child’s critical illness insurance vary from one provider to another. However, below is a list of some examples of what type of conditions may be covered:
- Down’s syndrome
- Cerebral palsy
- Cystic fibrosis
- Spina bifida
Are there any additional benefits?
You bet there are! Again, any additional coverage other than the common critical illnesses vary depending on your provider. Here are a few add-ons that may be included in your coverage:
- Pregnancy complications
- Hospitalization due to physical injuries resulting from an accident
- Loss of life
- Child care benefit
- Family accommodation benefit
- Child funeral benefit
- Emotional support, i.e., counselling or specialist nursing
When on the market for your children’s critical illness policy, we recommend you ask about additional benefits available as they can come in handy in times of great need. And if you’re not sure which coverage accommodates all your needs, you can consult an expert advisor to help you find the perfect policy that will provide you exactly what you need to protect you and your child.
What are the exclusions?
- Your claim process may not go through successfully if;
- The child’s condition has been present since birth.
- The illness’s symptoms first emerged before you took out the policy.
- The child passes away from a listed critical illness within the waiting period (usually within 14 days of being diagnosed).
Critical care claim conditions
The following conditions may apply regarding the claim process:
- You can only make one claim per child.
- The number of children you can seek critical illness support varies depending on your provider (usually a maximum of two children).
- Unless it’s included as an additional benefit, the insurer makes no payment if your child passes away.
- The main policy cover amount will usually not be affected despite making a claim on a children’s critical illness benefit
Dealing with a critically ill child can be extremely challenging emotionally and financially overwhelming if you don’t have insurance. The good news is, you can help avoid any financial worries by taking out a critical illness coverage policy for your children. Besides providing financial support, the policy may include additional benefits like counselling, childcare, and family accommodation to help with recovery.
So if you have children below the age of 21, we highly recommend you consider including them in your critical illness policy to cover any uncertainty.
Let us know if you have any questions regarding life insurance or critical illness cover in the comments below.