Take Cover Before You’re Hit By Cost Of Dementia
Independent life insurance and protection specialist LifeSearch is advising people to protect themselves against the expense of long-term care for Alzheimer’s and other forms of dementia.
More than 700,000 people in Britain have dementia, a figure that is expected to have risen to more than a million by 2025. Alzheimer’s now appears on the Association of British Insurers’ (ABI) list – which insurers must use – of the most common critical illnesses that should be covered. ‘If one of your parents suffered from Alzheimer’s disease then you will be considered more of a risk when being insured, but that’s not to say that you will be declined cover outright,’ says Kevin Carr, head of protection strategy at LifeSearch.
‘One of the key considerations is not just what your parents suffered from, but how old they were when it happened. If your parent was diagnosed with a disease in their forties, and you’re in your forties when you take your policy out, then your provider would see you as more of a risk. But overall, the individual circumstances of your own health will decide whether or not a family history of any particular illness will have a knock-on effect on the cost of your premium.
‘Ultimately, if you have a spouse and dependants and a sizeable amount of debt in the form of a large mortgage, then you need to weigh up what might happen and the potential cost of losing a salary,’ he says. All critical illness policies must cover 23 core conditions as recommended by the ABI. This includes seven of the most common illnesses or treatments (specific types of cancer, open-heart surgery, heart attacks, kidney failure, major organ transplants, multiple sclerosis and strokes). Any other conditions will be defined by the insurer.
Emma Walker, head of protection at moneysupermarket.com, recommends providers such as Legal & General and Axa, whose cover extends further than the ABI says it has to (they each cover more than 30 conditions).
Bupa covers about 40 illnesses, but is specific about which non-ABI defined conditions it will include (for instance, it will cover insulin-dependent diabetes only if diagnosed after the age of 45). Walker says: ‘This is a good policy if you’re looking for extra benefits such as counselling and advice on keeping yourself healthy.’ Provider Bright Grey offers all policyholders a ‘Helping Hand’ service, which gives family support, specialist nurses and therapists.
Prudential offers ‘serious illness’ cover, which offers small payouts for minor conditions that are not normally covered on other critical illness policies. It plans to bring out a new product next week which it claims will ‘revolutionise the critical illness market’.
Most banks, including Halifax and Nationwide, offer critical illness cover at the same time as taking out a mortgage, but Carr recommends customers ‘take cover only if you understand what a policy does and doesn’t do. If you buy a product directly [from your lender] and it’s the wrong cover for you, you might not be able to complain about it.’