As a contractor you are statistically at a very high risk from 'Critical illnesses' such as heart attack, stroke and cancer.
These illnesses would often have been killers even 15 years ago but are now treatable thanks to modern medical advances. However these same illnesses can leave you in a reduced state of health.
You can protect yourself from the potentially disastrous financial consequences of such conditions so that a lump sum is paid on diagnosis of the illness.
This can help pay for a period of convalescence, changes to home or car to accommodate a reduced state of mobility and go towards maintaining your independence. Without, perhaps, the burden of your mortgage and with money in the bank you can then decide whether you need to get back into the rat race.
Critical Illness Cover pays out a lump sum on earlier diagnosis of (i.e. not death from) a range of serious conditions such as cancer, heart attack and stroke.
Critical Illness Cover goes hand in hand with Permanent Health Insurance (PHI). However, note that whilst PHI pays a monthly income in event of illness, it stops once you are healthy enough to return to work.
A lump sum from a critical illness policy would be yours to keep, regardless of a return to some measure of good health and could maybe allow for some changes to your work pattern.
Policy aspects to consider are:
- Company Longevity: Will the company be around in 10 years time to meet any obligations?
- Meeting claims: Does the provider have a good track record of meeting claims.
- Conditions covered: Medical definitions of what is covered are very important and vary considerably between providers. These must be comprehensive enough to be of practical use to you in the event of a claim.
- Affordability: Premiums must remain affordable throughout so protection can be maintained you get older and even more likely to fall ill.
- Term: You can cover yourself for a fixed term (i.e. until children grow up /a debt is repaid) or for your whole life.
- Amount of cover: You can choose ‘level term’ meaning the same amount throughout, or ‘decreasing term’ which reduces in line with a reduced liability (i.e. a repayment mortgage).
- Payout terms: Lump sum, or paid annually (called ‘family income benefit’)
- Premium waivers: A 'waiver of premium' benefit is recommended to ensure premiums are maintained by the insurer if you suffer less serious illness that has meant that you are unable to work for 6 months or more.
Our chosen partner can offer a tailored range of specially selected ‘contractor friendly’ policies that reflect the unique way in which you work. This means that the protection can mirror that which you enjoyed when a permanent employee.
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