April 29, 2019

Total permanent disability is typically included with the specific medical conditions covered by a Critical illness policy.

This part of the policy pays out a lump sum if you are permanently disabled or incapacitated and unable to work for the rest of your life.

In other words, your condition is total, irreversible and life-changing. The reason for the total permanent disability does not have to be related to one of the listed medical conditions covered by the Critical illness policy.

As a general rule, TPD would pay out if a person is unable to work in their own occupation. Or occupation which they are suited to through either training, education or experience.

However, acceptance for TPD is not guaranteed and can be declined by the insurance provider for reasons relating to occupation or medical history. The cover could be restricted due to the life insured’s age.

Critical illness Cover

Critical illness cover is designed to protect against the financial implications of serious health conditions from which you might recover. This policy pays a tax-free lump sum if you are diagnosed with a defined Critical illness during the policy term.[

Also known as Critical illness insurance, these policies cover a vast range of serious illnesses or injuries listed within policy definitions. All Critical illness insurance policies cover three core conditions: cancers, heart attacks and strokes.

Each insurance provider covers the three core conditions and then offer a set of additional serious illnesses which are unique to them.

More comprehensive plans will cover many more conditions. Such as early-stage Cancer, Angioplasty, loss of hearing and sight, Total permanent disability, Crohn’s Disease and certain neurological conditions such as Alzheimer’s disease and Motor neurone disease.

The comprehensiveness of definitions will vary between providers as to how serious the condition must be in order for a claim to be successful. As advisers, we keep up to date with all insurers in the market and their policies as they evolve over time. Meaning that we can help you find the most comprehensive policy available within your budget.

Depending on individual requirements, the life insured’s children can also be covered by the policy up until at least age 18.

Terminal illness benefit or Critical illness insurance?

It is important to understand the difference between Terminal illness benefit and Critical illness insurance.  The Terminal illness benefit will only pay if you are diagnosed with an illness that leaves you with 12 months or less to live. Whereas Critical illness cover pays out a lump sum on diagnosis of one of a number of defined conditions, the majority of which could result in a full recovery.

The definition of Terminal illness, is where the illness has no known cure. Or, has progressed to a point where it can no longer be cured.

Life insurance policies usually include Terminal illness benefit
as standard. As such, it will pay out the sum assured if your doctor has confirmed you have a Terminal illness and are likely to die within 12 months.

If after a claim is paid by the Insurer, you do survive for longer than 12 months. The insurer won’t ask for any payment made to be paid back to them.

If you are interested in arranging protection insurance it really can pay to take expert advice.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

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Next steps

Whilst you are welcome to get a quote online but we would recommend you talk to one of our advisers.

Any quote that your adviser provides you with will take into account to your circumstances, your medical history, as well as your budget!

An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Please feel free to read our Independent client reviews, or read about the team at Future Proof

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