Patients diagnosed with early-stage breast cancer or ductal carcinoma in situ (DCIS) could receive an additional payout of up to £50,000 if they have critical illness cover, according to new research.
The research by Newspage, sponsored by Check Financial, found that critical illness cover pays between 25% and 50% of a £100,000 plan for an early-stage breast cancer or DCIS diagnosis. If the patient is later diagnosed with another condition or the illness progresses, they could claim the full £100,000 on top of the early payment.
Policy differences across providers
Insurance and financial experts say it is crucial to claim any additional payment available under a policy. Aviva Critical Illness Plan and Legal & General Critical Illness Cover both offer 25%, capped at £25,000. Royal London Critical Illness Cover offers up to 50%, but is capped at £35,000.
Zurich Personal Protection's enhanced level offers 50%, capped at £50,000. Guardian Critical Illness Protection also offers 50%, capped at £50,000.
Expert advice on claiming
Oliver Jordan, director of Watford-based Check Financial, said anyone in such a situation needed to make sure they claimed any additional payment. He added: "Usually the type of claim which has justified an additional payment rather than a full claim is deemed less invasive or less severe. To get the most value out of your insurance, you would want to claim an additional payout.
"It doesn't affect your overall sum assured so if you are unlucky enough to be diagnosed with something else or the condition progresses, you could claim in full too. This means someone with £100,000 of cover with Guardian could claim £50,000 for cancer in situ of the breast, if this then progresses to stage 1, you could then claim the full £100,000. £150,000 in total.
"The bigger concern is where providers aren't covering this at all. A simple comparison between the worst critical illness cover policy on the market with the best from 15 years ago shows the worst policy today is more comprehensive. Things like carcinoma in situ aren't covered at all by older plans. What is also concerning is future improvements meaning it is vital to regularly update your cover."
Support during treatment
Michelle Lawson, director of Fareham-based Lawson Financial, said it was an "excellent inclusion in a policy". She added: "Sums payable do differ from insurer to insurer, as do the terms and conditions of the point of payout and the policy wording itself. However, this cover is usually in addition to the standard sum insured and doesn't affect any future subsequent claims.
"Most claim payouts for this would be the lower of the sum insured or a set figure. This benefit can be used to bridge a gap for time off work, childcare, transport to and from hospital, private medical treatment, among other things that impact daily life following a diagnosis."
Scott Gallacher, director of Leicester-based Rowley Turton, said additional payments were "an improvement in critical illness cover". He added: "Critical illness policies were originally designed to pay when someone suffered a defined condition meeting specified severity criteria. An early diagnosis such as DCIS may not meet the definition for a full cancer payout. Historically, that could have meant no payment at all.
"Partial or additional payments therefore improve these policies, broadening cover rather than reducing it. In many cases, the balance of the main sum assured also remains intact, so the policy can still potentially pay the balance later if a more serious condition meets the definition."
Managing payout funds
Harvey Dhillon, founder and CEO of Zmartly, said people needed to be careful with the money if they got a payout. He added: "The gap worth worrying about is the one between that payment and the income you lose while you're off work. On a policy you own, the lump sum isn't taxed as income. Employees now get Statutory Sick Pay from the first day off, but that's only the legal minimum, so ask what your employer adds.
"The self-employed get no sick pay, and the Self Assessment bill due on January 31 can include an advance on this year's tax based on last year's bill. If profits drop this year, they can claim to cut that advance, though going too low means interest on the difference. Don't spend the lump sum until you've listed the bills due while your pay is down."
