Critical illness insurance can protect a business owner’s lifestyle, family and company in the event that they contract a serious illness that is covered under the policy. These policies provide financial assistance to cover re-training and repay loans offering peace of mind for everyone involved in the business.
What is critical illness insurance?
Critical illness insurance provides the insured with protection should he or she suffer from one of the specific medical conditions that are named on the plan. In the event of contracting one of the named illnesses, most insurance plans will either offer a lump sum to replace lost income, or financial protection for a loan or mortgage should repayments become difficult due to the illness.
Which critical illnesses are covered?
There are a wide range of plans, which relate to a variety of illnesses. Each plan is tailored to cover numerous illnesses and omissions vary widely between insurance companies. The majority of plans cover the insured for heart attacks, cancer and strokes.
The more comprehensive critical illness insurance plans on offer cover additional conditions including HIV/AIDS, Parkinson’s disease, Alzheimer’s disease, blindness, deafness, kidney failure and multiple sclerosis. In addition to the cover for an individual, several of the plans will cover the critical illness of a child or spouse. Therefore plans can be adjusted in order to meet the specific needs of an individual. However, you should always check your policy carefully to ensure you have the cover you want.
The benefits for business owners
If a business owner chooses not to have critical illness cover, his or her company and way of life is under threat in the event of a serious illness. Those who survive a critical illness can find a second hurdle is preserving their previous way of life during the recovery period.
Medical advances mean that the survival rate for a number of serious illnesses has increased dramatically in recent decades. However, those with debilitating illnesses may require home care, daily nursing care and assistance with retraining to continue with a career. Recovery can take many years and become a drain on the financial resources of a business and a family.
Although many business owners take out life insurance to provide financial protection for family and employees in the event of their death, fewer owners consider the importance of critical illness insurance. The risks are particularly high for smaller and medium-sized businesses, which are reliant on a small number of key individuals for the daily running of operations.
Uses of critical illness insurance payouts
If the owner has taken out critical illness insurance the company can benefit from a lump sum to reduce the impact of the illness. This lump sum can be used in a variety of ways to alleviate the immediate pressure on the business, including training a replacement, paying off business debts or offsetting expenses caused by the illness.
Protecting the business and the individual’s family members, critical illness insurance can be very beneficial in a time of need. Aside from covering mortgage repayments and other living expenses in the event of the policyholder contracting a critical illness, insurers may help with funding to sell a business, tax cover and money for retirement.
Holding a critical illness policy offers peace of mind to a business owner and the employees of the business. The owner has the option of taking out a group critical illness, which covers employees. A business owner who employs more than 50 employees can choose to take out such cover. Group critical illness insurance allows an employer to pay a tax-free lump sum directly to an employee in the event of an illness. This reduces pressure on the employee, alleviating stress and ideally facilitating a return to work.
Cost effective cover
Often the most cost effective critical illness insurance is included as a package with life insurance. It offers comprehensive cover for business owners in the event of critical illness or loss of life.
This article was supplied by the leading firm of Irish insurance brokers, Robertson Low, established in 1995 and the only Irish incorporated ‘Lloyd’s broker’.