The Orca Financial Guide to understanding
Serious Illness Cover
What exactly is Serious Illness Cover?
In Ireland, Serious Illness Cover (‘Critical Illness Cover’ or ‘Specified Illness Cover’) is often sold as an optional extra on a Life Insurance or a Mortgage Protection policy. It can also be sold as an insurance policy on its own.
Serious Illness Cover pays you a tax-free lump sum if you are diagnosed with a specific illness covered by your policy. This lump sum can be used to pay living expenses, your mortgage, short-term debt and your medical expenses, if necessary.
How does it work?
On the diagnosis of certain illnesses covered in your policy, the full capital sum insured is payable, and for other, less serious illnesses, part of the capital sum is payable.
Every insurance company is different and will cover different illnesses. The precise definitions of each illness that qualifies for a payout will also likely differ, as will decisions on whether the full or partial sum insured is payable on a confirmed medical diagnosis of that illness.
What about Surgery Benefits?
Some policies pay out a certain amount immediately if you require serious surgery, such as coronary artery bypass, graft or heart-valve replacement or repair surgery. This payment can help you to get prompt medical care, and gives you more choices on when and where to have the surgery carried out.
Can my children be covered?
Some Serious Illness Policies also cover your children for a limited amount, such as €15,000, should they be unfortunate enough to suffer from a certain serious illness covered by the policy.
What if my only health worry is cancer?
You could choose a Restricted Policy that only covers cancer. This may be suitable if you are not interested in protection against other illnesses, and may be available if you have a pre-existing medical condition that excludes you from comprehensive cover. The cost will generally be cheaper than a policy that covers several serious illnesses.