How Do I Know If I Should Add Any Of The Additional Benefits That Are Available When Taking Out Crit

Options when taking out critical illness cover include Total Permanent and Disability

, Indexation, Premium Waiver, Reinstatement and Replacement.

Adding on indexation to your plan would mean that the cover you requested at the start would not stay on a level basis but would actually increase. The rate of which it would increase by would be determined by the RPI, AEI or by a fixed percent every year. When this is calculated on the anniversary of the plan, the premium amount will also be reviewed at that time and will only increase in price and the provider would then typically review the premium not only on the increase in sum assured but also your age as you would then be a year older. You would be notified by the insurance provider of the increase and if you did not feel that you wanted to pay the increased premium for the higher level of cover then you would typically need to give the provider of the critical illness cover thirty days notice to cancel.

Premium waiver would only need to be taken out if they need their premiums to be paid if they were unable to work due to incapacity for example, however the premium would typically only be waived after six months. If and when you were able to return back to work then the premiums would stop being waived and you would continue to pay the premiums as normal, however if you were unable to work then the would continue to pay the premiums normally until you reached the maximum age of seventy or before if the policy term ended.

To add on the reinstatement option to your plan would mean that if you were to make a successful claim under the critical illness cover, you would then be given the option to take out another insurance plan, this insurance plan however would only cover a limited amount of illnesses and may depend on the condition suffered of which the critical illness claim was then made. The option to reinstate a new plan would only be able to be taken out for a period of time after the policy originally paid out and this would differ from one provider to another.

If you were to consider adding on replacement cover, it would mean that if your originally policy was taken out on a joint life basis and one of the life assured made a claim having the replacement cover option would mean that the other life assured could take out a new policy as their old plan would have ceased upon the previous claim. However typically the level of cover and the term of the contract would be determined by the original plan taken out as you would not be able to insure yourself for more or for a longer period than what the old plan covered you for.

Finally total and permanent disability is dependent on the occupation of the person covered as they would have to be totally and permanently unable to carry out their own occupation, a suited occupation or able to carry out a number of activities defined by the insurance provider and is then within the guidelines of the insurance plan, however most insurance companies do have different terms for TPD and therefore need to be checked individually.

All the options may seem of benefit to anyone considering such insurance however the cost of the plan will increase, and by how much would depend on the provider however an adviser would be able to break down the cost for you, for you then to make your decision.

by: Diane Kirby

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