Critical Illness Extra – Overview

Pays out a lump sum in the event of death, earlier diagnosis of a terminal illness or meeting the definition of one of the named critical illnesses within the term of the policy.

If your clients choose Critical Illness Extra, they will also be covered for the illnesses under Critical Illness Cover.

Target market

Family

Where a lump sum is required to help provide financial support to a spouse,  partner, registered civil partner or dependant in the event of death or becoming critically ill. 

Mortgage

Where there is an interest only mortgage and a need for a policy that pays out the same lump sum throughout the length of the policy in the event of death, terminal illness or critical illness.

Business

Where a lump sum is required to:

  • Cover the loss of a key person.
  • Purchase the shares owned by a director or partner.
  • Cover an interest only business loan.

Suitable if customers

  • Want to take advice on the suitability of the product
  • Want the level of cover to remain the same throughout the term of the policy.
  • Need a lump sum in the event of death, terminal illness (if life expectancy is less than 12 months) or critical illness and have dependants, and are not willing to self-insure or do not have funds elsewhere.
  • Have a business need to cover the loss of a key person, to provide finances to purchase shares of a director or partner in the event of their death, or to cover an interest only business loan.
  • Have medical conditions that do not prevent provisions of cover and are happy to be underwritten.         
  • Are UK resident and can afford monthly premiums for their chosen policy.
  • Want their premiums to be reviewable.  

Unsuitable if customers

  • Wish to purchase direct without advice
  • Want their policy to decrease (decreasing cover).
  • Want a product to pay a monthly benefit if they are unable to work for a period of time.
  • Want a product to pay a benefit if they are unable to work for a period of time due to accident or injury (IPB)
  • Do not have a business need to cover the loss of a key person, to provide finances to purchase shares of a director or partner in the event of their death, or to cover an interest only business loan.
  • Have health conditions that may result in cover not being issued.
  • Do not need death, terminal illness (if life expectancy is less than 12 months) and critical illness cover / without dependants and are willing to self-insure and have sufficient funds elsewhere.
  • Require a non-underwritten journey.
  • Are unable to afford their monthly premiums and are not UK resident.
  • Want their premiums to be guaranteed.

Amount of Cover

  • No minimum sum assured. Driven by minimum premium.
  • Maximum sum assured:
    £3 million - if Specific Work Tasks definition under TPD applies, or
    £2 million - if Own Occupation definition under TPD applies.
  • The amount of cover remains level throughout the term of the policy.

Term

  • The minimum term allowed is 5 years (2 years if Life Insurance with Critical Illness Cover or Critical Illness Extra is chosen).
  • The maximum term allowed is 40 years.

Age restrictions

  • The minimum age to take out a policy is 18. It is possible for a life of another policy to be taken on a 17 year old by an adult with insurable interest. This policy can then be placed in an Absolute trust with the 17 year old as the beneficiary.
  • The minimum age at the end of the policy is 29.
  • The maximum age for buying a policy is 64 (or 67 if Life Insurance with Critical Illness Cover or Critical Illness Extra is chosen).
  • The policy must end by their 70th birthday.

Premiums

  • Reviewable.
  • Payable monthly or annually by Direct Debit.

Options available

Benefits automatically included

If the policy is mortgage related, then the following are also included

Other information

  • For joint life policies, benefit is paid on the first critical illness claim or death, whichever occurs first.