While the majority of people who take out a critical illness policy choose a policy that also includes life insurance, there is also an option many don’t consider – a standalone critical insurance policy. So what’s the difference you might ask?

Well, a policy that includes life insurance means that on the death of the person holding the policy, or should that person suffer from a critical illness or become permanently disabled, then a lump sum benefit will be paid.

If you purchase a standalone critical illness policy it will only pay out the amount of benefit should you be unfortunate enough to be diagnosed with a serious critical illness or you should become permanently disabled.

However, in many cases, purchasing a combined policy of life insurance and critical illness does work out cheaper than purchasing a standalone policy.

The reason behind this is that the majority of people take out the combined policy and overlook the standalone; this means that competition is fiercer for the combined, which helps to keep premiums lower due to competition.

The standalone could however benefit you if you don’t have to worry about dependants – if there is no one depending on you then you might not need to take out life insurance. On the other hand, if you have already got coverage for life insurance and you are benefiting from a great deal, then you could consider taking out standalone critical illness insurance after shopping around for a good deal.

When purchasing a standalone policy it is in your best interest to shop around and compare as many companies as possible for the cheapest price and deal or use a specialist broker who can help. All policies have exclusions, so it is imperative that you understand the terms of your policy and what you are and are not covered for.

The small print should be looked at with a fine-tooth comb as this is where the exclusions will be hidden. While a policy might seem like a cheap deal, it could end up being nothing more than a worthless piece of paper should your claim be turned down due to an exclusion you didn’t realize was there.

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