Here’s our handy guide to understanding the importance of critical illness insurance — what it is, how it works and how it varies from other types of insurances.
Critical illness cover is insurance that pays you a lump sum if you are diagnosed with a particular illness.
Critical illness provides financial support for you and your family while dealing with your diagnosis, allowing you to concentrate on getting better without worrying about how you will be able to pay the bills.
As we stated earlier, critical illness cover helps support you and your loved ones financially if you’ve been diagnosed with a particular illness listed in your policy.
When you are diagnosed with a critical illness covered by your policy, you will receive a lump sum payment, which could help financially with bills/mortgage payments should you be unable to work.
Critical illness insurance doesn’t payout if you pass away. That is where life insurance comes in.
In most cases, life insurance only pays out if you pass away during the policy term. Taking out life insurance can act as a financial safety net to support your family in the event of your death.
Policies can differ in terms of which illness they cover, and this all depends on which insurer you choose. It’s good to speak to a protection specialist in Sheffield, as they can advise you on which policy goes well with your circumstances.
Critical illness insurance is a lot more expensive than life cover because you are more likely to make a claim.
That said, ensure you disclose any underlying health problems when taking the policy to avoid the risk of your claim being denied.
We aim to provide equal opportunity to all our customers when taking insurance out through ourselves.
Here at Sheffieldmoneyman, we offer all of our customers a free, no-obligation protection review, which involves us looking at any existing policies you have in place and assessing their suitability.
From this, we will look for critical illness, income protection and other mortgage protection insurance products that will meet your needs, and we will try and personalise this to your budget.
The higher your credit score is, the more likely that a lender will accept your application for a mortgage. This is different from the likelihood of someone with a poor credit score finding the same success. A mortgage lender will study your application carefully to determine whether or not you can afford a mortgage.
However, there is still no guarantee to be accepted the first time. Even if your credit score is pretty high. Each mortgage lender will have their own specific criteria that you need to match to obtain their deal, and it is unlikely that you will meet the criteria for all lenders across the panel.
Each lender’s criteria are different from another and they have developed their own unique ways of figuring out whether you match what they’re looking for or not. In some cases, you might actually find yourself matching up with the majority of them and in some cases, maybe you only match up with a few of them.
Here at Sheffieldmoneyman, our mortgage advisors in Sheffield will work alongside you and find the most suitable lender who offers the best deal for your circumstances, with criteria that you can meet. It is the job of your dedicated mortgage broker in Sheffield like us, to search for thousands of deals and hold your hand throughout the entire process, and always have your best interests at heart.
You will be kept in the loop at all times with what’s going on, so you’re not left stressed and confused about the process. It’s one of our many aims during your mortgage journey to make sure everything goes as smoothly and stress-free as it possibly can.
Whether you are a First Time Buyer in Sheffield, planning on Moving Home in Sheffield, or Self Employed, we will do our best to provide you with helpful tips and tricks to help you improve your credit score and eventually, secure an amazing mortgage that you’ll be thrilled to be walking away with.
There are a variety of different credit reference agencies in Sheffield you could go with, though the most popular ones are Experian and Equifax. Before you rush into anything, make sure that you do some research into each agency as some of them may be holding incorrect data and it could help you identify any discrepancies.
We personally would suggest using a platform called Check My File, as this collates data from all the major ones like the aforementioned two, giving you a wider overview of how your credit file is looking. In signing up, you will receive a free 30-day trial, followed by a monthly fee of £14.99. Your account can be cancelled at any time prior to the end of the trial should you see fit.
There are lots of different things you can do to improve your credit score. Here we have some for you to have a look at:
You will find that having multiple credit searches taken out against you could actually end up having a negative effect on your credit score in the long run. Even the use of price comparison websites is a factor that could harm your credit score.
If you are planning to apply for a mortgage, we strongly suggest that you avoid applying for any other credit in the meantime. Paying your credit back is a good thing for your score in the long run, providing that you can show lenders that you are able to maintain your monthly repayments.
That being said, borrowing during a mortgage application is something that could make the lender think that you cannot afford the deposit and are relying on the credit to give you a financial boost.
A great yet very simple way for you to get a boost to your credit score, is to register yourself for the electoral roll. It can demonstrate stability and this is something that the lenders like to see. You must make sure that your name is spelled correctly, and you must include your current registered address, not your previous one.
If you are not registered on the voters’ roll, you should definitely sign up for it. It is very easy to do online and it is something that could contribute well to improving your credit score.
Maxing out your card each month is something else that can actually reduce your credit score. The lender will prefer to see that you are using a credit card and paying off the balance in full each month, as this will show that you are good with your money management.
If a lender sees that you are exceeding credit card limits or overdrafts,it might give them the impression that you don’t take your finances seriously. This once again could drastically harm your chances of getting accepted for a mortgage.
Sometimes, if you have forgotten to tell a previous credit provider that you’ve moved into a new property, it can come across like you are actually living in multiple properties at the same time. Lenders don’t like to see this so you must make sure that you are on top of your address history so that it displays correctly on your credit report.
If you have a family member or ex-partner financially linked to you, this could be affecting your score without you even being aware of it. If the account is still live, then you won’t be able to get the financial association removed. If you want to remove any of these links, you should absolutely get in touch with the credit reference agencies and make a request.
Applicants see credit scoring as an unfair way to assess a mortgage application. Your mortgage lender would disagree with that, as at the end of the day, they are in the business of making money and they need to be sure you will be able to keep up your payments. It’s also much cheaper for them to operate through a computer-generated credit scoring system, as this keeps the process consistent and efficient.
Send an up-to-date copy of your credit report to your dedicated mortgage advisor in Sheffield ahead of time to increase your chances of being accepted the first time. The more your in-the-know your advisor is regarding your finances, the better it will be.
Also, there are still some lenders that prefer to operate the way companies used to and will manually assess your application. They will still have rules that they stick by regarding the number of defaults and CCJs that they will allow customers to have.
Mortgage Protection Insurance a term used to encompass various types of cover. They were designed to protect borrowers from events that could severely impact their ability to maintain mortgage payments.
However, there are different variations, but when connected to a mortgage, they are all there. To help provide peace of mind and usually fall into the following categories:
As a rule, if the policyholder dies within the term. Then the sum assured should be enough to pay off the outstanding mortgage balance. They are ensuring borrower’s dependents left with no debt. They might not otherwise be able to manage.
Our advisors can run through all the different types of life cover and recommend the most suitable plan for you.
Critical Illness Insurance works similarly to Life Assurance. In that, it can usually taker a specific term of years. That can have different options, such as level/increase. They got designed to pay out a lump sum and, like Life cover, for borrowers. It typically has taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit gets paid if you fall victim. To one of several specified critical illnesses and pays out. Whatever the long-term prognosis of that illness. The type of illnesses covered vary from company to company. That’s why this type of insurance cannot be solely price-driven, and we high;y recommend seeking advice.
In practice, many companies will offer Life and Critical Illness Critical cover. As a combined policy and would usually payout on the “first event.” For example, whatever happens first – either death or a severe illness – the payout is made. They can also get written on a single or joint life basis
Income Protection pays out a monthly amount designed to replace your wages in the event of you being unfit to work. Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered. The only factor is whether they make you unsuitable to work. There are, however, restrictions on how much you can cover and how quickly benefits would start to get paid.
Like Life and Critical Illness Cover. These policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies got written on a single life basis.
Probably the least common of the mortgage protection type policies but can often be valuable. Particularly for those with young families. These plans can get taken to cover Life and Critical Illness. They get underwritten on an application in the same way as mentioned above.
Rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Thus, it can replace the income of the primary breadwinner for several years. Dependent upon a particular client’s circumstances. It can usually get written on a level or basis, or an index-linked basis designed to keep up with inflation.
There’s an adage that says you can never have too much insurance. Indeed, many people have one or more of the different types of policy. However, it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. However, in the real world, affordability plays a massive part. So while it would be fantastic to cover yourself for every potential opportunity, our Mortgage Advisor in Sheffield will sit down with you and tailor the type of cover—the most suitable combination to your family’s priority and budget.
Life insurance is designed to pay out, usually in a lump sum, in the event of death. With regard to your mortgage, the sum assured should be enough to pay off your outstanding balance.
Here is some information about the most popular types:
The whole of life insurance does not have an end date. For one thing, providing premiums is being met the policy will payout. Generally speaking, this type of insurance is used for family protection and also as part of inheritance tax planning.
Term assurance is the most popular type of family insurance used to cover a mortgage.
For instance, our Mortgage Advisors in Sheffield will recommend the sum assured and term of the policy. Usually to run in line with your new mortgage. Providing that all premiums are maintained. The sum assured will be paid out if you were to die during the term.
There are various types of Term Assurance available, such as decreasing and increasing cover. As part of our personal protection review, the most suitable policy for your needs will be recommended.
This is another version of Term Assurance. Where instead of the sum assured is paid as a lump sum on death. It’s paid as an agreed monthly payment. In this case, it’s very good for families looking to insure an income.
A good advisor will usually recommend a mixture of insurance types tailor-made to match your personal and family requirements.
If you are part of a couple. You could consider taking out a single life policy that will payout in the event of one of you dying.
This can be cheaper than paying the premiums on two separate policies. However bear in mind that joint policies only payout on the first death, after that the cover ends.
If you had two separate policies. The second policy would remain in force even after a claim had been made on the first.
Many companies offer their employees family a lump sum payment. If the staff member dies while they are employed by the firm.
Although this doesn’t mean the death has to be at the workplace. Or in any way related to the job done. This cover will most likely end as soon as you leave the company.
Furthermore, it’s very important to us. That all of our customers are given an equal opportunity to take insurance our through ourselves. We wouldn’t be doing our job right if we didn’t mention it!
We offer all of our customers a free, no-obligation protection review. Where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which products, including critical illness and income protection that meet your needs. If required, we’ll then tailor the plan to match your available monthly budget.
Income Protection Insurance is designed to pay out a monthly benefit if you are unable to work due to illness or accident. The applicant can decide along with the help of their Advisor how much cover to take out. Also how long they are prepared to wait before they are entitled to put a claim in.
Income Protection insurance can be expensive compared to life cover. As you are far more likely to be unable to work due to illness than die. The monthly benefit continues to be paid out until you return to work unless you have selected the “Budget” version of the policy. This typically only pays out for 24 months but is much cheaper.
The big advantage of Income Protection Insurance is that unlike Critical Illness Cover it pays out for whatever is preventing you from working. Unlike Critical Illness which is just a list of specified illnesses.
This type of policy is very popular amongst the self-employed and also employed applicants who do not benefit from generous Employer sick pay schemes.
It’s very important to us that all of our customers are given an equal opportunity to take insurance our through ourselves. We wouldn’t be doing our job right if we didn’t mention it!
We offer all of our customers a free, no-obligation protection review where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which products, including critical illness and income protection that meet your needs. If required, we’ll then tailor the plan to match your available monthly budget.