Critical illness cover

Critical illness level term insurance

There are two main types of critical illness insurance. The first one is called level term insurance contract and this kind of insurance will pay constant sums of money during the duration of the plan in case of a successful claim. It is advisable to use this kind of insurance if the person wants to protect his family members or insure an interest only mortgage. For example, if Alice decided to take £100,000 of critical insurance cover and had a claim that was successful she will receive the same amount of money in the first year as in the last year of her insurance contract.

Critical illness decreasing term insurance

An alternative to this kind of contract is called decreasing critical ilness insurance. This type of insurance will pay decreasing amounts of money through the duration of the contract and is used most often when a person wants to protect the payments on a mortgage type of loan.

In addition to choosing a level term or decreasing critical ilness insurance a person can also choose from two types of premiums: guaranteed or reviewable. A reviewable premium is usually cheaper and can be altered or lowered after a specified amount of type. This period is stated in each contract but usually it is five years. The guaranteed premium is more expensive and remains unchanged during the insurance contract.