What are the benefits of taking out a serious illness policy?
A serious illness insurance policy will pay out a tax free lump sum to people who are diagnosed with one of the illnesses or disabilities that are covered by that policy. It is often sold as an extra benefit on a mortgage protection plan or life insurance policy and can also be called ‘critical illness cover’. It is worth people considering a serious illness policy if they have no other cover for ill health or disability or if they are not in paid employment and cannot purchase an income protection policy. It is also a good option for those with a mortgage, personal loan or other debts that still have to be paid even if serious illness prevents them from being able to earn. It is important to note that when people consider this type of cover, they realise it is not a replacement for income if they were out of work due to a long term illness. The reason for this is that some illnesses are serious enough to stop people working full time, but are not always covered by a serious illness policy.