Serious Illness cover pays out a tax free lump sum in the event that you contract one of the defined illnesses covered under the plan.
Typically the major conditions covered under a serious illness plan include certain types of malignant cancers, heart attack, stroke, and multiple sclerosis.
Serious Illness policies are becoming more and more comprehensive with some providers offering partial cover for certain illness, e.g. Friends First provide partial cover for early stage Breast cancer.
It is cover that merits serious consideration when you take into account statistics such as the following;
- Each year in Ireland there are over 20,000 new cases of cancer (Source: Cancer.ie October 2010)
- Each year approximately 10,000 Irish people have a stroke (Source: Irish Heart Foundation)
- You are 4 times more likely to suffer a serious illness before the age of 65, than die. (Source: Irish Life Claims 2010)
There are a number of ways you can set up a Serious Illness Plan.
Stand Alone Serious Illness
This is simply a Serious Illness plan with no life cover attaching.
Life & Standalone Serious Illness
Also known as Double Cover, this plan provides you with both life cover and serious illness cover. If a serious illness claim is paid out on this plan, the life cover remains in force. If you subsequently die during the term of the policy, a second claim will be paid.
Life & Accelerated Serious Illness
Similarly this plan provides you with both life cover and serious illness cover, however, if a serious illness claim is paid on this type of plan, the life cover amount is reduced by the claimed amount. If you die without ever making a serious illness claim, the full life cover payment is made. E.g. John has a policy covering €100,000 life cover and €50,000 accelerated serious illness over 20 years. After 10 years John suffers a major stroke and is paid €50,000. 2 years later John dies, his estate is paid an amount of €50,000.