As an insurance broker in Maidenhead, we have a ‘top 10’ list of most frequently asked insurance questions – and this particular question is always on it.
Sadly, it’s a question we can never answer. After all, how can anyone know when or if another person is going to get ill? Illness is generally something that people react and adapt to. You can’t really proactively avoid it.
However, when even the UK’s most high-profile people fall ill – the recent announcement that the Princess of Wales is undergoing treatment for cancer being a prime example – it shines a light on just how arbitrary illness is. Illness can fall on anybody at any time.
As a result, only the person asking the question posed in the headline can provide the answer. How important is critical illness protection? Well, it all depends on how critically you need access to a tax-free lump sum to support your lost income, or adapt your home if you find yourself unwell.
What is critical illness protection?
Critical illness insurance provides those with cover with a lump sum of money if they become unwell with certain – and often severe – illnesses such as cancer, a stroke and heart attacks.
Being ill is stressful in itself. Throw into the mix the need to pay a mortgage, cover the household bills and run a family, too, and the pressure is likely to build – particularly if the person affected doesn’t have savings to fall back on. Macmillan Cancer Support research suggests that four in five cancer patients are hit with an average cost of £570 a month as a result of their illness, so the financial impact of illness can be significant.
As a Maidenhead insurance broker that has access to some of the UK’s best critical illness insurance deals, we understand just how important adequate healthcare cover is.
And whilst it’s easy to say ‘it won’t happen to me’, how sure can you really be?
Critical illness data
Aviva’s Individual protection claims report 2023, which covers claims made in 2022, shines a light on risk when it comes to critical illness insurance.
In 2022, Aviva paid out £334m over 4,689 critical Illness claims with an average pay-out of £71,246. However, in this case, it’s less the monetary statistics that are of note and more the age ranges at which the claims are made that stand out.
Under the age of 30 years old, critical illness claims by male and female were 1.7 per cent and 2.1 per cent respectively. Between the ages of 30 – 39, this jumps to 9 per cent (male) and 11.7 per cent (female). However, it’s the 40 – 49 age band where things start to notably change, with critical illness insurance claims jumping to 23.8 per cent in men and 37.2 per cent in women.
This increases substantially again in the 50 – 59-year-old band before decreasing for those aged 60 and upwards.
It’s probably no surprise that cancer tops the most common reason for the claim, with men accounting for 49.7 per cent and women coming in considerably higher at 71.6 per cent.
Appetite for risk
The data is clear – the older you get, the higher the risk.
What is perhaps more disconcerting is that critical illness risk appears to increase at the stage of life when people are having a family and, therefore, are likely to be highly dependent on a regular, stable income.
So, how important is critical illness insurance? Well, it depends on you and your appetite for risk. Perhaps the real question is are you prepared to live with the risk but without insurance? If the answer’s no, then we can help.
Explore your critical illness insurance options by speaking with a Maidenhead insurance adviser. Simply contact the team by calling 01628 560820 or emailing enquiries@altonmortgages.co.uk.