7 - Critical Illness Insurance

Question 1

When is the latest guide to ci policies

Answer 1

2022

Question 1

When was ABI create critical illness policies

Answer 1

1999

Question 2

Stand alone CIC - what type of policies are they typically

Answer 2

Guaranteed or reviewable policies or unit-linked

Question 3

Why do some offices offer pay regular instalment of capital policies than lump sum?

Answer 3

Cheaper alternatives

Question 4

What is typical policy length of CIC

Answer 4

20-30 years

Question 5

What is it called if CIC added to life policy

Answer 5

accelerated death payment

Question 6

What type of trust is used for CIC

Answer 6

split benefit trust

Not for standalone critical illness cover, normally has death benefit

Question 7

What is a split benefit trust

Answer 7

This can be achieved using a split benefit trust, under which the death benefit is held in trust for beneficiaries, and the critical illness benefit is held for the absolute benefit of the insured person if there is a claim,

Question 8

Should stand alone critical illness cover put into trust

Answer 8

NO

Question 9

What is the usual survival period on stand alone CI policies for a policy to be valid

Answer 9

14-30 days

Question 10

What is children cover cic

Answer 10

Children’s cover offers an additional sum assured payable on the diagnosis of a critical illness in the child of the policyholder, subject to the child meeting the requisite survival period.

Question 11

What is the usual deferred period on wop on CI

Answer 11

26 weeks

Question 12

What are the normal conditions for CIC

Answer 12

Can never do occupation again
Can never do anything again (you will not recover, unlike IP)

Question 13

When is terminal illness cover not paid out

Answer 13

in last 12-18months of policy

Question 14

What are some conditions covered by cic

Answer 14

loss of limbs
kidney removal - perm dialysis
blindness
disease surgery
coma
dementia
deafness

Question 15

What tax is CI benefit subject to

Answer 15

Non except potentially IHT of die before spending money orIT if group policy paid by employer

Question 16

What are the main considerations when recommending CI policy

Answer 16

TPD options
Other options
Survival definition
Stand alone/combined/joint life etc
Guaranteed or rviewabke premiums

Question 17

What is total permenant disability benefit

Answer 17

Catch all of condition where, although not specified, quality of life is so poor

Question 18

Severity based cover

Answer 18

Introduced by vitality lfie - his type of contract covers many more illnesses but pays out only a pre-specified proportion of the sum insured on diagnosis. It does, however, add the benefit of allowing more than one claim if an illness is progressive.