Is Specified Illness Cover worth paying for?

Life is complicated enough when you’re healthy, fit and have a steady income coming in. But we often take our health for granted, especially when we’re younger. No one needs the added financial and emotional problems that a serious illness can bring.  Sometimes, without warning, these things happen and while no one likes to think about becoming seriously ill, it pays to be prepared for the future.

Ask yourself, how would I or my family cope if I got seriously ill?

What is Specified Illness Cover?

Specified illness cover is a benefit which pays a one-off lump sum if you suffer one of the specific illnesses covered under your plan. Typically, the major conditions covered include certain types of malignant cancer, heart attack, stroke and multiple sclerosis.

You choose the amount of cover you need and how to use it. For example, if you became ill, the pay-out could cover your mortgage, loan repayments or everyday bills and expenses, leaving you to concentrate on getting better.

What is covered in a typical serious illness policy?

If you are thinking about taking out serious illness insurance, it is important to realise that it would not replace your income if you were out of work because of a long-term illness.

Serious illness insurance will only pay out if the illness is covered by the policy. Many illnesses that would prevent you from working may not be covered by your policy. Even when the illness is covered, the policy pays a once-off lump sum and not an ongoing income.

Not all policies will cover the same illnesses, or common illness, such as angina, back injury and treatable cancers, so check with your advisor or insurer for details of the illnesses covered before you take out a policy.

The list of illnesses varies between insurers but usually includes stroke and heart attack, some types of cancer, coronary artery disease, multiple sclerosis, kidney failure, motor neuron disease, blindness, major organ transplantation (including being on a waiting list for transplantation), a benign brain tumour and severe burns.

You may be tempted to choose a policy that covers the most illnesses. But it is more important to consider the definitions of illnesses. With some policies your condition would have to be extremely serious before you can make a claim.

Do you need specified illness cover?

You may want to consider specified illness insurance if:

  • you have no other cover for ill health;
  • you are not in paid employment, so you may not be able to purchase income protection;
  • you have a mortgage, personal loans or other debts that you would still have to pay if you became seriously ill and possibly unable to earn an income;
  • you have dependants who rely on your income or unpaid work, such as work you do in the home or in a family business.

Are there any policy restrictions?

You will not usually be covered if:

  • your illness is judged to be caused by drug or alcohol abuse, a self-inflicted injury or your failure to follow medical advice;
  • your illness existed before you applied for insurance and you failed to say this in your application;
  • your illness came about because you were involved in dangerous or criminal activities;
  • you live outside the ‘territorial limits’ of the policy for a certain number of months of the year. The territorial limits may vary from policy to policy but would usually mean all EU countries.

As you are four times more likely to contract a serious illness before the age of 65 than you are to die, specified-illness policies can be expensive and somewhat restrictive, however it is a solution worthy of consideration for those looking to protect their family and dependents.

Gerard O’Brien LL.B LL.M CFP® QFA is a Certified Financial Planner and the Owner of Heritage Wealth, a Financial Planning practice based in Main Street, Midleton, Cork. For more information, contact Gerard at

Disclaimer: All data and information provided within this article is for informational purposes only. Heritage Wealth Management Limited makes no representations as to accuracy, completeness, suitability, or validity of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries, or damages arising from its use.