How much Dread Disease Cover do you need?

dread-disease insurance coverDread diseases – including cancer, heart attacks and other coronary diseases, and strokes – are responsible for millions of deaths and disabilities around the world each year. While the thought of contracting these diseases is far from pleasant, the reality is that any of us could have the misfortune of suffering from these illnesses at some point during our lives.

Why Dread Disease Cover is Important

Dread Disease Cover is a type of insurance that covers the additional costs of living with and surviving a serious illness.

Patients who undergo surgery or on-going treatment for dread diseases are faced with a host of extra expenses, including changes to their homes and vehicles, wheelchairs and walkers, increased transport costs during their treatment, and many others. Dread Disease cover can ease the burden of these extra costs.

How much cover do you need?

  • The ideal amount of Dread Disease Cover will vary from person to person, depending on income, levels of debt, and the other insurance policies that you may have.
  • Dread Disease Cover is meant to compensate you for the extra costs of living with the illness and its after-effects. However, relying on this type of cover to replace your income or pay off your major debts is not a wise strategy.

If you have Income Replacement Cover or Life Insurance, you may not need a large amount of Dread Disease Cover – your financial advisor will help you to analyse the costs you might incur if you suffered from a dread disease, and will suggest the right policy and cover amount.

Do you need stand-alone Dread Disease Cover?

Some insurers offer Dread Disease Cover in two different forms – you may choose to allocate part of your Life Insurance to cover dread diseases (accelerated cover) or take out stand-alone Dread Disease Cover.

It’s important to note that accelerated cover may be cheaper than stand-alone cover, but if you claim on the dread disease portion of your cover, the amount you are paid out will be deducted from your total life cover, meaning that your dependants will receive a smaller pay-out following your death.

Stand-alone cover will not reduce your Life Insurance pay-out and you may claim more than once for different illnesses if you have dedicated Dread Disease Cover.

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