Have You Protected Your Most Valuable Asset?
What is your most valuable asset? Some people may choose their home, their car or their mobile phone; however, your most valuable asset is you! You represent the value of your future earnings; as your future earnings rely on you being fit and well enough to continue to earn money. With this in mind, why do so few of us place little value on insuring ourselves?
We readily insure our pets, our mobile phones, cars and holidays yet are reluctant to protect ourselves. If your pet was to need treatment the average vet bill is estimated to be £810* while if you were to fall ill and unable to work your costs to cover your mortgage, bills and living expenses would quickly run into thousands of pounds.
To put this into perspective….
- 20.4 million people in the UK have contents insurance compared to just 1.5 million who have critical illness protection. (figures relate to ABI statistics)
- The average cost of mobile phone insurance for an iPhone 6 is around £12 a month. We recently quoted a critical illness plan for a 25-year-old non-smoker with cover until state retirement age (68), and a pay out of £50,000 upon diagnosis of a critical illness for just £16 a month.
It is important to realise just how much of a devastating impact a critical illness can have on your life and not just in regards to your health. A recent report by Aviva found that many families have less than £100 in savings, which would not go far to cover mortgage/rent and other living expenses.
Being diagnosed with a critical illness is not something that any of us would like to plan for however statistics show that the possibility of this happening is not something we can ignore:
- 1 in 2 people born after 1960 in the UK will be diagnosed with some form of cancer in their lifetime*.
- 515 people will go to hospital every day as a result of a heart attack*.
- Approximately 152,000 strokes are recorded per year in the UK, which equates to more than 1 every 5 minutes.
- 100,000 people in the UK are living with Multiple Sclerosis (MS) and around 5,000 people are diagnosed each year*.
At KDW we have been helping our clients to financially plan for their future since 1978; from our experience, we realise that many of our clients prioritise retirement planning and investments. All too often Critical Illness cover, along with other assurance policies, are neglected
Cost seems to be the biggest factor in deterring people from taking out a critical illness policy. Unfortunately, as the chance of developing a critical illness, and in turn having to claim on your policy, is high the cost of the monthly premium is affected.
We believe that cost should not discourage you from taking out a critical illness policy; as already mentioned the monthly premium can be as low as £16 per month (it is important to note that this will vary on a case by case basis) and sadly the chance of us being diagnosed with a critical illness higher than we assume. We would advise speaking to an independent financial adviser to obtain a valuation and to discuss the alternative assurance policies that may be a better fit for your situation.
A common misconception amongst our clients is that if they have private health cover they will not benefit from critical illness cover. While their health cover will cover the cost of the treatment it may not stretch to medication and rehabilitation costs and most definitely will not cover the costs of bills, mortgage/rent payments or living expenses.
Ultimately a lack of understanding of critical illness policies prevents people from enquiring about critical illness policies; with many confused about the illnesses that will be included in the policy. This will vary by providers but the most common illnesses covered are:
- Alzheimer’s or dementia
- Bacterial meningitis
- Benign brain tumour
- Benign spinal cord tumour
- Blindness
- Cancer
- Cardiac arrest
- Coma
- Deafness
- Heart
- Heart valve replacement or repair
- HIV infection
- Kidney failure
- Liver failure
- Loss of hands or feet
- Loss of independent existence
- Loss of speech
- Major organ transplant
- Motor neurone
- Multiple sclerosis
- Paralysis of a limb
- Parkinson’s disease
- Severe lung disease
- Stroke
- Third degree burns
- Traumatic brain injury
Please note that this is not a definitive list and the illnesses and degree of illnesses will vary by provider and case. It is important that you check the policy details.
If you are diagnosed with one of the critical illnesses covered in your policy during the term you will be paid a lump sum (as defined in your policy).