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This point comes up a lot in discussions with people and even with the explanation of terms in the "Protection Terms" thread, it can still be a little confusing so I wanted to give an example as it is very important for people to know.
If we take a couple that have a family protection plan in place which has (just for example) €100,000 life cover on both of them and also €100,000 specified illness cover on both of them. It’s understandable to think that there are 4 possible events that the plan may pay out on, death of either partner or diagnosis of a specified illness of either partner.
However, if the cover is "Joint" and the specified illness cover is "Accelerated", once one single event occurs, that is the end of the plan. For example, using the details above, if one of the partners were diagnosed with one of the specified illnesses, let’s say a heart attack occured, the plan will pay out €100,000 specified illness cover but as the cover is accelerated, the life cover is now used up and as the plan was joint, the other partner’s cover is also gone.
In a real family situation, this would mean that there is no longer cover in place. The person that suffered the heart attack will most likely not get accepted for further specified illness cover, may be declined or heavily "rated" for life cover. The other partner would then have to apply newly for cover and depending on their current health and age, may have to pay a higher premium than before or possibly be rated or even declined.
This is one of the reasons why it is so important to review your cover and fully understand what type of cover you have, not just the amount of cover, as the difference can be very important.
As always, if you have any questions regarding the above, please do not hesitate to contact me or likewise if you would like to arrange an appointment for a review. Dave.
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