Chapter 7- Critical Illness Cover

Question 1

When was guidance introduced to help consumers compare CIC?

Answer 1

1999

Question 2

What is the usual survival period on stand alone CIC policies?

Answer 2

14-30 days

Question 3

What is the usual deferred period of wop on CIC?

Answer 3

26 weeks

Question 4

What circumstances is policy splitting sometimes offered?

Answer 4

Divorce/separation on joint life policies

Question 5

What is Total and Permanent Disability benefit?

Answer 5

Catch all of condition where, although not specified, quality of life is so poor they will never live a ‘normal life’ again.

Question 6

What are the key factors for underwriting CIC?

Answer 6

Age, medical history, family medical history, lifestyle factors

Question 7

What tax is Individual CIC benefit subject to?

Answer 7

Non.
Except potentially IHT if dies before spending money .
No CGT.

Question 8

What are the main considerations when recommending a CIC policy?

Answer 8

1. Total and Permanent Disability options
2. Other options eg. children’s cover, WOP, guaranteed insurability or indexation.
3. Survival definition
4. Stand alone/combined/joint life etc
5. Guaranteed or reviewable premiums

Question 9

What is the tax treatment of group CIC?

Answer 9

No tax due on claim

If premium is paid by the employer, the premium is taxable as a benefit in kind.