Insurance is a wonderful thing to have and should ease your mind if some crisis happens. All too often when insurance policies are discussed the medical questions can leave people a bit unnerved and queasy. Critical illness plans are a form of insurance that pay out a lump sum once you have been diagnosed with some sort of ‘critical’ illness that is life-threatening or prevents you from being able to continue your employment that should help you to meet the costs of your financial commitments like mortgage repayments and household bills for a time.

It is imperative that you get the key documents once you have signed up for a critical illness plan. That may seem an obvious thing to say but here follows a cautionary tale.

A woman, on becoming self-employed, in order to meet the requirements of her bank with whom she had her mortgage, was advised to take out a critical illness plan. She duly met with the advisor who spent an hour with her talking about the benefits and assessing how much she would need to pay to cover the cost of her mortgage payments at least if she were unable to work due to critical illness. Medical questions about family history regarding, kidney disease, cancer, heart disease and suchlike were discussed. Having given pertinent information on whether she smoked, her age, general health etc she left with a pack of papers that outlined her financial commitment to the policy and the information she had given the advisor. She was not given the key documents plan but only discovered she was not in possession of this vital document when she made a claim a year later.

The woman had unfortunately developed a brain tumor, a meningioma that had to be excised by opening up her skull and removing the offending tumor. There was no alternative to an operation, as the tumor would continue to grow and be ultimately fatal if not removed. She was delighted that it was diagnosed as benign and there were no secondary growths and relieved the only negative results were a large horseshoe scar on her skull and some compromised mobility function in her left leg – a small price to pay. Having paid out for critical illness and survived the 28 days subsequent to surgery the policy had outlined, she rang to make a claim. They asked her for her key documents policy number. She couldn’t find a number on the paperwork given to her by the bank advisor. The company said they would send out the relevant document. On receipt of the document she put things into play and her doctor was contacted to verify the details. No payout! The tumor wasn’t ‘cancerous, secondary and invasive’. That was a bit of a blow. Somewhat aggrieved she read through the key document. Kidney disease was only due for payout if it was secondary [by that time it is usually fatal!] and heart disease claims only paid out if open-heart surgery was done by a consultant – hard luck if you had a key-hole operation. Had she been in possession of the key document, and as her doctor commented also, there was no good reason for taking out this insurance as its terms were so restrictive…and only paid out if you survived – it was not life cover.