Sales went up and in 1997 the ABI (Association of British Insurers) gave a figure of 579000 sold polices in the UK. This was the recorded sales and combined with the unrecorded sales which companies did not show the number went up to almost 700,000. In this a growth of 30% was seen as compared to year 1996 and the 68% growth in 1995.

The increased popularity of critical illness insurance resulted in the definition of two variants of critical illness, viz, Standalone and Accelerated.  Accelerated insurance was a combination of polices like maybe critical illness insurance and mortgage. This increased the popularity as seen by the increased sales than the sales of the Standalone policy. The increase was as much as 60% as compared to other polices.

The type of policy dictated the duration of the cover wherein it could be payable yearly and /or ongoing for 40 years. In the UK most companies offer guaranteed rates of the critical illness products but the majority remained as riders to the insurance for critical illness rather than for the standalone polices.

The standalone policy does provide direct benefits but the proviso is that the claimant has to live for a period of one month to receive the claim.  This led to a marked decrease in its sales. Critical illness insurance was presented as a list of diseases that the policy covered and customers could select the policy of their choice. If a disease was diagnosed then the client would get a single payment of the sum insured as a tax free lump sum.

Initially critical illness insurance covered seven core illnesses but as competition increased so did the range of illnesses covered by the various insurance companies.  The ABI says that globally critical illness lists around 30 diseases where some companies even include Aplastic Anemia and angioplasty to their product definition.

Insurance policies are a plenty but you should be able to differentiate between a private medical policy and critical illness cover. Your company policies regarding critical illness need to be kept in mind too. At times you may be awarded a lump sum which is tax free if you are diagnosed as being critically ill.  Remember private medical insurance only pays charges on severe illness, not critical but severe. Again, income protection insurance will pay you for the duration you were unable to work due to illness or accident and it will stop when you rejoin work.

ABI or the association of British insurers says that there are a variety of policies that cover different types of critical illnesses. Each has its own terms and conditions and the company will pay as per that only. The ABI has also put out model definitions wherein it details the critical illness covered. Insurance companies that cover critical illness sometimes use these in resolving claims. It is a good idea to check all the leaflets and documents on the subject of critical illness before you make a decision on which to go in for. Talk to your company for details and advice on how to insure yourself against critical illness and how to choose the best policy.

There are seven core critical illnesses covered by most insurance companies which are classified as coronary artery bypass surgery, kidney failure, cancer, heart attack, multiple sclerosis and major organ transplant. In today’s lifestyle these are the most common illnesses so a lot of companies include these in their policies. ABI has listed another set of problems which are Parkinson’s disease, coma, benign brain tumor, and deafness, loss of speech, motor neuron disease, third degree burns, and paralysis/paraplegia along with aorta graft surgery, terminal illness and heart valve repair and /or replacement.

The above mentioned may not be covered in toto but many insurance companies do include these in their list so their clients get a comprehensive cover. There are companies who also add total and permanent disability which is not mentioned but works on the same rules as the ABI.

People go in for a critical insurance cover to protect their families and it is a good idea to look around for as many quotes and programs you can find so that you can select the best one applicable to you. With a clearer picture of what you need you can go for the best.