Complete Financial Questionnaire

Serious Illness Cover – The Ultimate Guide

Guide to Serious Illness Cover

Here’s the number one thing you need to know about Life Insurance: it isn’t actually for you; it’s to prevent a financial crisis for those you leave behind.

However, if you want to protect yourself while you’re alive and kicking on this planet, then Serious Illness Cover is what you need.

Also known as Serious Illness Cover or Critical Illness Cover, Specified Serious Illness Cover pays you cash money if you get a serious illness. But more about that in a second.

What is Serious Illness Cover?

Serious illness cover is a type of insurance that pays you a tax-free lump sum if you get sick with one of the illnesses listed on your policy.

It’s mostly the big ones: types of cancer, a heart attack or stroke – the kind of illnesses that usually mean having to give up work for several months, so your wallet gets pretty sick too.

What illnesses are covered by Serious Illness Insurance?

It varies depending on the provider. Zurich Life, for example, considers 81 illnesses as critical illnesses.

Three big illnesses account for approximately 81 per cent of all claims:

  • Cancer
  • Heart attack
  • Stroke

The next 8 serious illnesses together account for around 17 per cent of claims:

  • Angioplasty for heart disease.
  • Bacterial meningitis.
  • Benign brain tumour.
  • Cardiomyopathy
  • Coronary artery bypass.
  • Heart valve replacement or repair.
  • Multiple Sclerosis.
  • Parkinson’s Disease

The remaining serious illnesses account for approximately 2 per cent of claims paid, for example:

  • Blindness
  • Coma
  • Deafness
  • Heart Structural Repair
  • Intensive Care
  • Kidney Failure
  • Liver Failure
  • Major Organ Transplant
  • Permanent Total Disability.

We have compiled a comparison of the illnesses covered by each insurer.

Go here to find out which serious illness cover provider in best in 2021.

serious_illness_cover_percentage_of_claims

While lots of illnesses are covered, many more aren’t – and some of those not covered would also keep you out of work for quite a while, e.g. mental health issues or back pain.

Likewise, not all policies cover the same illnesses, such as back injury or various cancers. Generally though (I stress the ‘generally’), the insurers will cover strokes, heart attacks, some types of cancer, heart disease, MS, major organ transplants, and brain tumours.

Most policies also include partial Serious Illness Cover for your children.

Who offers the best Serious Illness Cover plan?

It’s between New Ireland and Zurich Life.

New Ireland covers a larger amount of serious illnesses.

Zurich Life has a better definition of stroke, making it easier to claim. They also offer Booster Payments and Child Specific Illness Cover:

Zurich Life Serious Illness Cover

In the end, it may come down to the premium they each charge.

In this blog, I show you how to compare serious illness cover in 4 easy steps.

Do you actually need Serious Illness Cover?

serious_illness_cover_for_ill_health

It depends. I could give you a pitch here and talk you into it, but instead, I’m going to lay it out so you can decide for yourself.

You should consider getting Serious Illness Protection if you have no other cover for ill health, e.g. sick pay entitlements through work or income protection. It’s also useful if you’re between jobs or unemployed as you could struggle to pay for the best treatment should illness strike.

Lastly, if you have dependents who rely on your income, Serious Illness Cover makes sense.

Is it worth getting critical illness cover? Yes, but only if you can’t get income protection.

Chances of a Serious Illness Cover in Ireland (3)

What’s the difference between income protection and life insurance?

Using a car insurance analogy (h/t to Matthew Chapman), serious illness cover is your third party fire and theft in that it covers you for specific claimable events – covers any damage to a third party or their property resulting from an incident as well as any damage to your own vehicle caused by fire or theft.

On the other hand, income protection is like comprehensive car insurance, which covers your car for any damage caused to it.

Serious illness cover – think specific, defined illnesses only (third party, fire and theft).

Income protection – think of any illness or accident that stops your working (comprehensive insurance).

difference between income protection and serious illness cover

How to claim on Serious Illness Cover

9_in_10_serious_illness_cover_claims_are_paid_out_each_year

If you do have to make a claim, the insurer will pay out if you meet three conditions (of course, there are conditions):

  1. Your illness is covered in your policy.
  2. Your diagnosis matches the definition of that illness outlined by the insurance company in your policy.
  3. You survive for a given period of time after diagnosis (generally a week or two).

Okay, so you might be tempted to roll your eyes at the T&Cs, scoff and say, “ah, sure they’ll find a way of not paying out”.

But guess what percentage of serious illness claims are paid each year.

Would you be surprised if I said it was 90 per cent?

Yes, 9 in 10 claims are paid.

Only 1 in 10 doesn’t meet the T&Cs.

What’s the difference between Health Insurance and Serious Illness Cover?

Health Insurance basics

Health Insurance is a comprehensive plan that may cover things like hospitalisation expenses, maternity benefits, surgery, or treatments. The extent of coverage usually relates to your plan’s cost: Generally, the more expensive your plan, the more that’s covered.

Serious Illness Cover basics

Serious Illness pays out a tax-free lump sum (😍) if you’re diagnosed with one of the specific illnesses or disabilities that your policy covers (☹️).

What’s the difference in cost between Health Insurance and Serious Illness Cover?

Health Insurance is one of the most expensive types of insurance you can get – because there are loads of claims. There’s a pretty high chance that you’ll get sick at some point during your cover. It is what it is.

With Irish Life Health, the cheapest basic cover starts at around €40 a month, while the enhanced cover costs over €300 a month. With VHI, the current cheapest cover starts at €37 a month and rises to €85 for basic cover.

How much does Serious Illness Cover cost?

The cost of Serious Illness Cover will depend on the amount of cover, your age, health, whether you smoke, and how long you want to insure yourself for.

My guideline is that €30,000 cover is enough for most people, provided they also have income protection. You can read more on the maths of that here, but it boils down to giving you the financial security to be able to quit working for a year to focus on getting better…without money worries.

Get a quote; you’d be surprised how little Serious Illness actually costs. It’s often much less than you’d expect – maybe the cost of a couple of pints, or whatever you’re having yourself, across the month.

When you think of it like that, you’d be bananas not to consider it.

Are there any extra benefits with Serious Illness policies?

extra_benefits_serious_illness_cover

Some insurance companies offer benefits on top of the policy, though generally, you’ll pay more for them.

Extra benefits include:

  • Broken bones payments.
  • A conversion/convertible option lets you convert your cover into a new policy down the line or extend your policy without needing to provide medical information.
  • Personal accident benefit – where you receive a weekly payment for a limited period of time or if you’re out of work due to an accident.
  • Hospital cash – essentially, it’s a daily payment that’s ‘spending money’ while you have to stay in hospital. It usually includes a waiting period before the cover kicks in.
  • One‑to‑one personal support from your own Nurse Adviser – supports you and your family through a serious illness.

Should you get Specified Illness Cover on its own or as a bundle?

NEVER add Serious Illness Cover to your Mortgage Protection policy because the banks get any pay-out on Serious Illness if it’s on your Mortgage Protection policy. I’ll bet the bank never told you that, the swine.

Instead, buy Serious Illness Cover on an accelerated basis (see below) as part of your Life Insurance policy (provided you’re not using your life insurance as security for a mortgage… if you do so, the bank, not you, will get the serious illness pay-out).

What’s the difference between Accelerated or Additional Serious Illness Cover?

There are three ways to buy specified serious illness cover:

1. Standalone/Independent: Here, you simply buy a separate Serious Illness policy. Should you get one of the illnesses, your policy pays out.

The one big danger in buying on a standalone/independent basis is the “Survival Period.”

A life insurance survival period is the length of time you must live after being diagnosed with a critical illness. Only if you pass the survival period will the insurance benefit payout. It is usually for 14 days.

I know it sounds gruesome; why would the insurers add such a sick clause?

They designed critical illness payouts to help you financially if you get sick and have to quit working for a while and suffer a drop in income.

Serious illness cover is not a death benefit. That’s what life insurance is for.

2. Accelerated: Or you can add Accelerated Illness cover to your life insurance policy. Your policy will pay-out should you get a serious illness, but the insurer will reduce your remaining life cover by the amount of the claim paid.

3. Additional: Finally, you can buy Additional Cover. The difference being your life cover amount is unaffected by a Serious Illness claim.

Here’s a blog post that explains the difference between Accelerated and Additional Illness cover in detail and recommends which one is best.

In case you couldn’t be arsed to read that piece…Accelerated is the way to go.

To help this make total sense, let’s look at a scenario. Peter Parker is a 25-year-old man with a penchant for red suits and spider webs.

He’s got a Life Insurance policy for €100,000 and €50,000 Serious Illness Cover.

If Peter claims accelerated serious illness cover policy, he will get €50,000, and if he dies, Mary Jane, his other half, would receive the remaining sum, i.e. the €50,000.

With additional serious illness cover, he’d receive the €50,000, and if he dies, Mary Jane will receive the full LI policy, i.e. the €100,000, additionally.

What about Serious Illness Cover for children?

As with Life Insurance, you can’t buy Serious Illness Cover for a child, but they are covered automatically on their parent’s policy…

…IF THE PARENT has Serious Illness Cover.

Again, the amount of free cover depends on the insurer you choose:

  • Aviva, Zurich and Irish Life: The lower of €25,000 or 50 per cent of the parent’s illness cover amount. A child covered to 25 if in full-time education.
  • Royal London and New Ireland: The lower of €25,000 or 50 per cent of the parent’s illness cover amount. A child covered to 21 if in full-time education.

What happens if I’m refused Illness Cover? What are my options?

Don’t worry; you still have some options available, like Cancer Only Cover and Multi Claim Protection Cover.

What is Cancer Only Cover?

Cancer Only Cover is available to anyone aged 18 to 60. It will pay you a cash lump sum if you’re diagnosed with cancer, as defined by your policy, during the term of the plan.

Types of cancers that would ordinarily be covered include:

  • Breast
  • Prostate
  • Bowel
  • Lung
  • Gynae
  • Testicular
  • Malignant melanoma skin cancer.

Cancer Only Cover is an insurance policy that will pay out should you contract a certain type of cancer. The cancer definition is the same one as can be found on a Serious Illness policy. This gives you the peace of mind that a cancer claim payable under a Critical Illness policy will also be met on a Cancer Only policy.

Okay, so why not buy Serious Illness Cover instead?

Cancer Only Cover is available even if you have been refused Serious Illness, or you think you would be refused Serious Illness protection due to a pre-existing health condition. This includes people with a medical history of:

• Heart attacks.
• Angioplasty.
• Angina.
• Valvular disease.
• Stroke.
• Obesity.
• Diabetes.
• Kidney problems.
• Multiple Sclerosis.

What are the main claims made for Cancer Only Cover?

main_claims_made_for_cancer_only_cover

For women, the main causes of claims over the past 12 months were as follows:

Breast: 53 per cent.
• Bowel: 8 per cent.
• Skin: 8 per cent.
• Ovarian: 6 per cent.
Endometrial: 6 per cent.
• Cervical: 3 per cent.

For men, they were:

Prostate: 23 per cent.
• Brain: 11 per cent.
• Bowel: 11 per cent.
• Testicular: 7 per cent.
• Lung: 7 per cent.
• Melanoma: 4 per cent.
• Kidney: 2 per cent.

Is it difficult to get Cancer Only Cover?

No, the underwriting is much simpler for Cancer Only Cover than Serious Illness Cover, so it’s an easier process.

How much is Cancer Only Cover compared to Serious Illness Cover?

I’ll quote for a 40-year-old, non-smoker, €250,000 life cover over 25 years.

With €50,000 Serious Illness Cover, the monthly premium is €60 per month. With €50,000 cancer cover, the premium is €45 per month.

So you get a decent discount because all illnesses are not covered, but the Big C is…and that accounts for more claims than any other. Seems reasonable enough to me.

But really, if you have been refused Serious Illness, price isn’t the most important thing, is it?

What is Multi Claim Protection Cover?

Multi Claim Protection Cover (MCPC) is a new type of policy that pays out based on the severity of an illness and its impact on your life.

severity of illness table

For example, a severe illness like a major organ transplant will payout 100% of your cover. MS will payout 50%, heart attack 20%, angioplasty 5%.

The motive here is that because medicine has improved, people are getting earlier diagnoses, faster treatment, and recovering quicker, so illnesses have less of an impact on people’s lives.

Following treatment, many people return to life and work as normal in a short space of time. Therefore there isn’t such a need for a product that pays out 100% of the claim in one go.

Here’s an in-depth analysis of Multi Claim Protection Cover – it’s the ‘Batbelt of protection products’.

Why should you buy Serious Illness Cover asap?

Here are six superb reasons why you should buy serious illness cover when you’re young and before your health goes down the toilet.

Here is a list of the illnesses future you are most likely to get.

  1. Autoimmune illnesses
  2. Piling on the pounds
  3. Family history events
  4. MRIs and/or angiograms
  5. Type 2 diabetes
  6. Claimable illnesses

Let’s go through them in more detail.

1) Autoimmune illnesses

You might be asking what autoimmune diseases are?

Instead of trying to explain each one, in turn, look at this chart instead; how many have you heard of?

autoimmune illnesses

I regularly see applications from young people (in their 20s/30s) who have suffered from one of these illnesses.

Autoimmune disorders are indiscriminate bastards who can strike at any time, at any age.

With remarkable consistency, every single one of the illnesses listed in that chart is most likely to happen when you’re 30 years old. Half of all customers with those ailments will get them in their 20s, the other half in their 40s and 50s. They are not illnesses of the elderly.

Once you have contracted an autoimmune disorder, it makes it harder to get serious illness cover.

2) Piling on the pounds

You don’t need an athletic build to get the normal price for serious illness cover.

But as you get older, your metabolism slows down, so your once toned physique can start to get a bit, well, flabby.

 

If we don’t watch ourselves, all of a sudden, we’re at a BMI that causes a problem for serious illness cover.

So before the old waistline begin to expand even further, apply for serious illness cover. Simply waiting 12 months could mean the difference between getting the normal price and paying 50% more.

The third reason to take out serious illness cover now is family history.

3) Family history events

This is the next most common barrier to getting the normal price for serious illness cover.

The longer you wait to get cover, the more potential there is for family history events to cause problems.

Stephen used the example of a lady, Sarah, whose mother had breast cancer in her early 50s. Sarah can get serious illness cover including cancer cover.

However, if Sarah had applied after her sister was diagnosed with breast cancer, she will face a cancer exclusion.

Get cover in place before family history events start to arise.

The longer you leave it, the more chance your parents, brothers, or sister suffer an illness that will affect your application.

Let’s move on to reason number 4 – tests/investigations.

4) MRIs and/or angiograms

Buy serious illness cover before you start to get symptoms that result in your GP referring you for tests

Back in the day, you went to your GP with a headache, and he’d send you home with some Anadin.

Nowadays, the underwriters find that if you look crooked at your doctor so much, they will send you off for screening.

In particular, a problematic one is brain MRIs like this one:

brain mri

See the white patches?

They are called white opacities and are very common.

Their importance is contentious in the medical industry, so your GP might not have any issue with them.

But in the insurance industry, they can cause severe difficulty in terms of getting serious illness cover.

I’m not saying you should try and get cover before a planned MRI.

Because at that stage it’s too late.

Instead, buy critical illness cover long before your GP has any reason to send you for such a screening.

Let’s move on to reason number 5:

5) Type 2 Diabetes:

There’s an awful lot of sugar consumed in Ireland these days and because of this Type 2 Diabetes is common and will be more prevalent in the future….at ever earlier ages.

You can’t get serious illness cover or income protection once you have been diagnosed with Type 2 Diabetes. And your life insurance premiums will be significantly higher than normal.

But you can still get cancer cover.

Unfortunately, many of you reading this article (or your loved ones) will develop Type 2 Diabetes.

If you think you’re at risk, you should get serious illness cover while you still can. And remember, your children are included in your policy. Zurich Life payout if they get Type 1 Diabetes.

And finally, here’s reason number 6 not to put off serious illness cover any longer.

6) Claimable illnesses

Cast your eyes back up to the autoimmune illnesses chart, and there are two illnesses in particular that you should note:

  • Lupus
  • Multiple Sclerosis

The reason I have highlighted these two is that they are claimable illnesses on a serious illness contract.

We see many applications from customers who have been diagnosed with multiple sclerosis in their 20s and 30s.

If only they had taken out serious illness cover before their diagnosis, they would have received a payout on their policy.

We, as an industry, are doing young people a disservice if we don’t try to get them cover before these illnesses strike.

Over to you…

Congratulations on getting this far, that was a whopper!

Hopefully, you found that useful, especially if you’re sitting on the fence about buying serious illness cover.

If this spurs you on to pull the trigger on serious illness cover, then I’ve done my job.

I pray you never suffer a specified illness, but if you do, you’ll look back on this article as the most important article you have ever read.

If you’d like me to make a recommendation for you, please complete this questionnaire, and I’ll be right back.

Or give me a bell on 05793 20836

Or schedule a callback here.

Talk soon 🤳

Nick

life_insurance_quote

Specified Illness Cover
Give us a quick outline of how we can help and we'll be right back to you.

Cancer Cover is Possible (even if you can't get serious illness cover)

She walked slowly into the room and looked John straight in the eye.

“I’m sorry, but I have bad news…”

John heard the word “cancer” then his own thoughts drowned out the words tumbling from his doctor’s mouth.

Don’t know where to start?

Have a nose through our free life insurance guides

View our guides

Life Insurance Quotes - Free and Easy!

As Ireland's leading life insurance broker, we specialise in comparing the rates and policies from the top five Irish life insurance providers and offering the very best value quotes to suit the individual needs of our clients. Our expertise lies in finding a suitable insurance plan for those with specific needs, be it a particular illness, occupation or claim history, we've got you covered in every sense!

Watch our video