decreasing life insurance with critical illness cover

Decreasing Life Insurance with Critical Illness Cover: Everything You Need to Know

decreasing life insurance with critical illness cover

What is Decreasing Life Insurance with Critical Illness Cover?

Decreasing life insurance with critical illness cover is a type of life insurance policy that provides a lump sum payment if you are diagnosed with a critical illness. The cover amount decreases over time, in line with the decreasing balance of your mortgage or other loan.

Critical illnesses covered by these policies typically include cancer, heart attack, stroke, and multiple sclerosis. The payout from the policy can be used to cover the costs of treatment, lost income, or other expenses.

How Does Decreasing Life Insurance with Critical Illness Cover Work?

Decreasing life insurance with critical illness cover works by paying out a lump sum payment if you are diagnosed with a critical illness. The amount of the payout is typically a percentage of the sum assured, and it decreases over time in line with the decreasing balance of your mortgage or other loan.

For example, if you have a decreasing life insurance policy with a sum assured of £100,000 and a mortgage balance of £50,000, the payout would be £50,000 if you were diagnosed with a critical illness. If you had paid off half of your mortgage by the time you were diagnosed, the payout would be £25,000.

What are the Benefits of Decreasing Life Insurance with Critical Illness Cover?

There are several benefits to decreasing life insurance with critical illness cover, including:

  • Provides financial security in the event of a critical illness: The lump sum payout can help to cover the costs of treatment, lost income, or other expenses.
  • Peace of mind: Knowing that you have financial protection in the event of a critical illness can give you peace of mind.
  • Flexible: Decreasing life insurance with critical illness cover can be tailored to your individual needs, including the amount of cover and the length of the policy term.
  • Affordable: Decreasing life insurance with critical illness cover is typically more affordable than other types of life insurance, making it a good option for those on a budget.

Who Needs Decreasing Life Insurance with Critical Illness Cover?

Decreasing life insurance with critical illness cover is a good option for anyone who has a mortgage or other loan and wants to protect their family in the event of a critical illness. It is also a good option for those who are concerned about the financial impact of a critical illness on their family.

How to Choose a Decreasing Life Insurance with Critical Illness Cover Policy

When choosing a decreasing life insurance with critical illness cover policy, there are several factors to consider, including:

  • The amount of cover: The amount of cover you need will depend on your individual circumstances, including the size of your mortgage or other loan and your income.
  • The length of the policy term: The length of the policy term should match the term of your mortgage or other loan.
  • The cost of the policy: The cost of the policy will vary depending on the amount of cover, the length of the policy term, and your age and health.
  • The terms and conditions of the policy: It is important to read the terms and conditions of the policy carefully before you purchase it, to make sure that you understand what is covered and what is not.

What are the Exclusions of Decreasing Life Insurance with Critical Illness Cover?

Decreasing life insurance with critical illness cover policies typically have a number of exclusions, including:

  • Death from natural causes: Decreasing life insurance with critical illness cover policies do not cover death from natural causes.
  • Suicide: Decreasing life insurance with critical illness cover policies do not cover suicide.
  • Pre-existing conditions: Decreasing life insurance with critical illness cover policies may not cover pre-existing conditions.
  • Certain critical illnesses: Decreasing life insurance with critical illness cover policies may not cover certain critical illnesses, such as HIV/AIDS.

How to Make a Claim on a Decreasing Life Insurance with Critical Illness Cover Policy

If you are diagnosed with a critical illness, you can make a claim on your decreasing life insurance with critical illness cover policy by contacting your insurance provider. You will need to provide proof of your diagnosis, such as a letter from your doctor.

Your insurance provider will then process your claim and pay out the lump sum benefit. The payout can be used to cover the costs of treatment, lost income, or other expenses.

Conclusion

Decreasing life insurance with critical illness cover can provide valuable financial protection in the event of a critical illness. It is a good option for anyone who has a mortgage or other loan and wants to protect their family in the event of a critical illness. When choosing a policy, it is important to consider the amount of cover you need, the length of the policy term, the cost of the policy, and the terms and conditions of the policy.

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