Critical Illness
This is perhaps one of the most contentious types of insurance currently available. As the name suggests, it provides cover against a range of illnesses deemed critical - the most common ones are heart attack, cancer and stroke. As with life insurance, it is designed to provide a lump sum. Unlike life insurance, you don't have to die for the plan to pay out.
As with life insurance, critical illness plans are available as either term insurance or whole of life plans. However, insurance companies won't normally hold cover past age 65 because the actuarial chances of suffering from a critical illness increases dramatically with age.
It is especially suited to single people that want protection for themselves but that doesn't mean to say it isn't suitable for couples with families. Unlike life insurance premiums, the cost of critical illness cover has risen dramatically over recent years and if you have an existing plan chances are you can't replace it with anything cheaper. If you are taking out a new plan, make sure that you understand the terms and conditions in relation to what is and isn't covered by the plan.
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