‘Illness Insurance’ is a regular internet search term but what are people looking for when they type this search term in?  People who know about critical illness insurance tend to use that search term whereas those who are aware of income protection will enter the term ‘income protection’ or ‘permanent health insurance.’

Illness insurance can be anything between critical illness, income protection or mortgage payment protection insurance.  The fact is that further questions need to be asked.  If someone wants illness insurance how long do they want cover for?  What kind of benefit are they seeking?  What is the purpose of cover?  The only chance someone has of entering in the search term ‘illness insurance’ is if they find a site that clearly explains the various options available to them, so here goes:-

Critical Illness Insurance

Critical illness insurance is lump sum benefit (also known as dread disease and CIC) designed to pay out on diagnosis of a specified disease or illness.  More often than not people arrange critical illness policies using term assurances where the benefit is set for a specific term.

Mortgage Payment Protection Insurance  

Mortgage payment protection insurance is designed to pay your monthly mortgage amount plus associated costs for a limited term (usually 12 or 24 months) if you are made redundant or you suffer an accident or illness.  Policies can be set up to cover accident/ illness or redundancy or both.  There is no medical underwriting with this type of policy.

Income Protection

Income protection insurance is one of the most flexible types of insurance available.  Any accident or illness is covered (subject to a few exclusions such as self inflicted injury) and you can arrange for a replacement income to be paid to you after a deferred period.  The benefit can be paid until you return to work, retire if you are unable to work, or if you die before the end of the term.  Usually the maximum you can insure your salary for is around 60% of your current gross pay but benefits are paid tax free (under current tax laws).

Hopefully ‘illness insurance’ might now lead someone to finding the product that matches their needs a little better.