Types of Health Cover

There are three main types of insurance which protect you against the ill health: critical illness cover, medical health insurance and long-term care insurance.

Critical Illness Cover
This is an insurance policy which pays out a tax-free lump sum should the policyholder be diagnosed with one of the critical illnesses in the policy. Each policy varies in the number of conditions it covers. However all policies will cover heart attack, cancer and strokes. Amongst other conditions which may be covered are:

Coronary artery by-pass surgery
Alzheimer's disease
Blindness
Deafness
Kidney failure
Organ transplant
Multiple sclerosis
Parkinson's Disease
Terminal illness

There will be conditions within each type of illness or condition too. For example Parkinson's will only be covered if the symptoms of it are not permanent. The same applies to cover for Multiple Sclerosis where there are often periods of remission.

Critical illness cover is sold separately but also often in conjunction with life and mortgage life insurance and costs vary depending on your sex, age, lifestyle, occupation, whether you are a smoker and your personal and family medical history.

The payout is designed to take away the financial burden of a critical illness for example any loss of earnings from not being able to work.


The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: A Guide To Critical Illness Cover.


Long-Term Care Insurance


This covers people when they need long term care because they are unable to perform the basic activities of daily living (ADL's), for example: bathing, dressing, toileting, eating, continence, getting in and out of a bed or chair and walking.

60% of people over 65 will need some kind of long-term care within their lifetimes however 40% of people who get long term care are between 18 and 64.

With long-term care insurance you are covered for your care either at home, or in a residential or nursing home. There are three ways to fund this:

Immediate:
You pay a lump sum which entitles you to care straightaway and ensures you have care for as long as you need it

Regular premiums
You pay regular premiums or a lump sum to cover you for future long term care.

Equity Release Plans
Equity release allows you to exchange some of the equity in a house to pay for long term care premiums. This may be useful for those who have no mortgage and a low income level.

As with all insurance the cost of cover depends on your age, sex and state of health at the time you take out your policy. Generally however, State provision for long term care is considered skant so it may be a worthwhile investment.

The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: A Guide To Long Term Care Insurance.


Private Medical Insurance


Private medical insurance covers people for their medical care during periods of acute illness.

Although the NHS provides free treatment for all citizens some people prefer to use private medical insurance. Private care can generally be delivered quicker and people also consider that private hospitals are cleaner and offer a higher standard of comfort to patients.

Payment for private health insurance is via monthly or one-off yearly premiums and cost is dependent on a range of factors including age, sex, general health and whether the customer smokes.

Costs for medical cover vary and usually the private medical insurance company pays the healthcare provider directly. However less expensive health insurance is available via Freedom, a cheap health insurance plan which gives you cash and allows you to choose your own outpatient care.

The Association of British Insurers (ABI) has published a handy guide to help you if you are looking for this type of cover: Are You Buying Private Medical Insurance?