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Critical illness cover – two sides to the story

Helping clients to understand the challenges and risks they face is at the heart of our Partners& purpose.

We talk about the physical, cyber and people risks that the business is facing or could face in the future.

People risk, in particular, key person cover, is often overlooked or considered an unnecessary expense unless it is a requirement from investors. Protecting against the unexpected can be difficult to justify, particularly in the current economic environment, and especially when it comes to extending cover to include critical illness protection.

The impact of not having critical illness cover
In 2021, our Wellbeing, Health and Protection team were discussing this topic with a potential new client and explained what critical illness cover is and how it can provide financial support to a business if something were to happen to a key individual.

At that time, the company decided not to go ahead with the proposed cover.

Earlier this year, two years later, we learned that the CEO of the business had suffered serious cardiac and respiratory complications following the removal of a tumour from her heart. Although now, thankfully, she’s on the road to recovery, the illness has meant that she’s unable to work.

As a result, the business that she worked so hard to bring to life and grow has had to deal not only with the personal difficulties of this situation, but also the financial impact on the business.

It may well be possible for the individual to secure some kind of life insurance or critical illness cover in the future, but that would likely involve significant costs and/or exclusions.

How critical illness insurance can help you, your family and your business
Having critical illness cover can really help a business continue to operate when a key individual is taken ill.

The owner of a small, family-run agricultural business suffered a heart attack in November 2021. A normally fit, healthy an active 50-something person, this came completely out of the blue and had an immediate impact on both the family and the business. He was responsible for the majority of the physical work involved and although he was very lucky to only suffer a relatively mild heart attack, he still needed time to recover.

But without being able to work, the business – and therefore the family – could have been faced with bills to pay with no money coming in.

Fortunately, the gentleman had taken out life insurance that included critical illness cover. Not only to cover the mortgage on the family home, but also a separate policy to support the business if anything were to happen to either him or his wife.

Both policies paid out a lump sum under the critical illness cover meaning that not only did the family have a financial buffer to support them, but he could take time out from the business.

The funds helped with the costs of temporary staff and also some new equipment to make some of the physical jobs that bit easier.

Can you afford not to consider critical illness cover?
Morale of the story – we don’t know what will happen…but we do know that when you put measures in place to protect yourself, your family and your business, you have security when you need it most.