Critical Illness Insurance - Integrated or Stand Alone?
Integrated life cover:
Critical illness cover can be set up with integrated life insurance, which means that the policy will pay out the full sum assured either on diagnosis of a critical illness covered by the policy or on death.
There will be no diminution of the quality or range of the covered critical illnesses, the actual critical illness cover would normally be identical in every way to the same providers' stand-alone critical illness cover.
If you already have adequate life insurance cover, you may not have considered looking at integrated life/critical illness cover. However, due to greater competition between providers in the integrated market, the cost of integrated life/critical illness cover can actually be cheaper than 'stand alone' cover, which pays out nothing on death.
Stand-alone critical illness cover:
Critical illness cover set up on a 'stand alone' basis pays out nothing on death, except sometimes a trivial sum of perhaps £100.
If the insured person suffers a critical illness (and assuming it is one covered by their policy) he or she will have to survive a set minimum period after diagnosis of the critical illness before the claim would be paid out. If they die within the survival period, the policy will pay nothing whatsoever.
The survival period will be stated in the policy document and typical survival periods are either 14 or 28 days. Very rarely, a stand-alone critical illness policy has no minimum survival period.
