Being diagnosed with a critical illness is devastating at the best of times but if you have large financial commitments to cover and you can no longer work then it can be a period of intense worry. There are ways to cover the cost of your bills and living expenses after diagnosis though and these are well worth considering, especially if you are the main breadwinner for your family.

Critical Illness Cover
The main financial product that can help in the event of a critical illness diagnosis is Critical Illness Cover. This type of insurance pays out an agreed lump sum of cash soon after diagnosis and this can be used to pay your mortgage and bills or for any other financial commitments you may have.

When policies talk of critical illness they generally mean the big three – cancer, heart attack and stroke – but your individual policy will include a list of the illness that are covered and those that aren’t. This type of insurance is often added to a life insurance policy as an extra form of cover however it can be taken out as a stand alone product if you prefer.

Having a lump sum paid to you on diagnosis takes a great weight off your shoulders in relation to the short term and depending on the amount that you specified in the policy you could have enough to live on for up to a year. But what if you can’t return to work for a longer period of time and your lump sum is starting to dwindle?

Income Protection Insurance
This is an additional financial product that can help in the long term. In simple terms, this insurance pays out a percentage of your normal income each month until you are able to return to work. This then gives some assurance that the bills and essentials are paid and you have enough to live on.

Generally speaking the top level of cover pays around 60% of the monthly income you’d be earning if you were working however you can opt for less than this if you think you can afford to live on it. Payments start after a predetermined length of time and the longer you leave it the less your premiums are. So for example, if you have critical illness cover that pays a lump sum and this amount is calculated to pay the bills for 6 months then you can arrange for your income protection payments to start in the sixth month after you finish working. This will make your premiums less than if you start the payments immediately.

One thing to watch though is that you calculate your figures properly as you could end up having to live for a month or two with no money if your get the figures wrong.

Insuring against critical illness isn’t at the top of many people’s priorities but it is worth thinking about. There are numerous providers available and finding a policy to fit your needs isn’t hard so take a minute now and have a look to see what’s available for you and your family.