Serious Illness Insurance - why would I want this?

If we had mentioned swine flu a couple of weeks ago the chances are that most people would never have heard of it. Despite the fact that risks to us in the UK are low at the moment, it just goes to show how quickly health related issues can change for all of us. Despite this most of us take our health and well being largely for granted. Of course nobody wants to dwell on the unpleasant "what ifs" in life for a moment longer than they need to. But it's an unfortunate reality that about one in five of us will face a serious illness at some point in our working life. Indeed it's a real irony of advances in medical science that as the population's longevity as a whole increases the chances of our having a serious illness also increases.

In 1983 when the first insurance policies were sold they only provided cover against the four most dreaded events of cancer, heart attacks, strokes and by passes (Policies have been known as "dread disease" and "critical illness", with many companies still using this last description.). Since then we have seen an explosion of cover for up to 154 different conditions ranging from Alzheimers to tunnel vision.

As the name suggests cover can be bought to provide protection against a variety of diseases and conditions which although not always life threatening, can seriously impair your quality of life, and even worse your ability to carry on working. What happens when an event occurs or you are diagnosed with a serious illness will vary from policy to policy, but generally the cover is provided to help pay for all the things that you have to carry on paying for when you are ill, whether that's as simple as day to day outgoings, adapting your home to cater for a disability, through to paying the mortgage.

Actually, being able to carry on paying a mortgage is one of the things that has been thought about most by companies that provide insurance, leading to them developing policies which are bought on their own, or which "bolt onto" any life insurance you take out to repay the mortgage in the event of your death. Some policies are structured to repay some of the mortgage on diagnosis of a condition, whilst others pay the full amount immediately with no further payment later.

Whilst some of us will be fortunate enough to have this insurance provided through their employer, for many looking into serious illness insurance cover should be a sensible part of their personal finance arrangements. Serious illness cover is unusual because it can provide useful cover whether or not you have any dependants.

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