Critical Illness Cover Analyzing Your Options

Critical Illness Cover: Analyzing Your Options

Thinking about incorporating critical illness cover (CI cover) into your portfolio of insurance is a smart move. But once you sit down and start comparing one plan with the next, you might feel your head spinning and think you’re in immediate need of medical attention from the dizzying array of complex variables dancing before your eyes.

Relax. Have a sip of tea. It’s not you; it’s the cacophony of plans all vying for your attention. Yes, comparing the assorted cornucopia of CI offerings can be overwhelming, indeed. Instead of trying to decipher how one plan as a whole lines up against another (and another and yet another), break it down and analyze your options by comparing sections of the plans piece by piece.

One Bite at a Time

The only manageable way to analyze what the different plans have to offer is to approach them the same way you’d approach eating an elephant (not that we recommend devouring a pachyderm). Take individual facets of the plans, and compare just those parts to each other, one at a time. Before you know it you’ll be pulling out the plans that don’t meet your qualifications for various reasons, and be able to focus on the gems that are the finalists.

The example used for demonstration purposes below assumes a married female aged 61, who is concerned about breast cancer and wants to secure an appreciably large payout of £3,000,000. Referencing one of the online cover comparison sites,* plans will be sized up and kept or released from consideration, depending on their compatibility.

Important note:

The CI industry is changing so swiftly, that sometimes, details shown on comparison charts are out of date within a day of posting! Therefore, if you find that you are happy with most of the facets of a plan, but one or two factors don’t fit your needs, you might want to visit the company’s own website or give them a call to confirm which information is the freshest. You might miss out on the plan of your dreams if you don’t follow up with a call!

Age

The simplest way to begin is to sort through the plans by the maximum allowable age for initial purchase. If you’re better than the maximum age listed for a plan, you needn’t waste your time poring through its details. Starting with the age facet is the quickest way to cull the unqualified plans from your roster of candidates.

Of the 20 plans considered, six don’t meet the age requirement, so those are out of the running. (Remember: this is just an example--those particular plans may be excellent choices for your own situation!).

An additional seven companies have a maximum sign-up age of 64, while one company lists a cut-off age of 63. Those age limitations are important to notice, because if the sign-up age is low, it’s possible--although not definitive--that the term ends at a lower-scaled age, as well. Set these aside for now, but you might reconsider them later.

That leaves six remaining contenders. See how quickly you’re thinning the herd?

Conditions

Next, compare the conditions column. Since cancer is a concern in the family, see which firms cover that illness. All of the firms do, but Quotezone and AIG Direct only offer “variable” cancer coverage. That’s a detail you’ll want to investigate deeper. For now, all six remaining companies make this cut.

Turning attention to other potential conditions, see how many illnesses are covered by each plan. Note that “covering” a malady does not necessarily mean covering 100%! One firm may cover 90% of two illnesses, while another company boasts 50 illnesses that are covered...but in the fine print, you discover the level of all that cover is 10%.

Aegone: 43 conditions

AIG Direct: “up to 2 conditions”

Nationwide: 41 conditions

Quotezone: “varies”

Scottish Provident: “up to 44 conditions”

Skandia: 53 conditions

For the example, all of these are acceptable, with a reminder to follow up for details on conditions covered.

Payout

A payout of £3,000,000 is desired. Aegone, Nationwide and Scottish Provident all meet that threshold. The others are dropped from the comparison.

Nearly Done!

In just three steps, you have reduced a raucous party of 20 down to a cozy coffee klatch of three contenders. Now you can dig deeper without thoroughly exhausting yourself!

Don’t drive yourself sick trying to compare critical illness cover. Analyze your options bit by bit, and soon, the answers practically reveal themselves to you.

The author suggests that for a great resource on critical illness cover, visit http://www.uswitch.com/life-insurance/critical-illness-cover/ part of the comprehensive advice and information section on uSwitch.com