Life Insurance with Critical Illness Cover: Types of cover

Direct Line Critical Illness cover has two types of cover:

• Fixed Term Life Cover with Critical Illness
• Mortgage Life Cover with Critical Illness

Fixed term life cover with critical Illness

This is a protection policy that will pay out a cash lump sum if you die or are diagnosed with a critical illness that meets our policy definition within a set period of time known as the policy term. The amount of cover remains fixed throughout the policy term.

Mortgage life cover with critical illness

Unlike the Fixed Term policy, this is a decreasing protection policy where the level of cover reduces each year during the term of the policy roughly in line with the outstanding balance on a standard repayment mortgage – hence it is frequently referred to as “mortgage protection”.

Provided the initial sum insured and term are the same as the mortgage at the outset it means that in the event of death or diagnosis of a critical illness that meets our policy definition the policy should be sufficient to repay the mortgage provided interest rates have not risen above 12% p.a.

General policy information applying to both products

• Minimum age to take out a policy is 18 next birthday

• Maximum age to start a policy is 65 next birthday

• Minimum term is 5 years

• Maximum period of cover is up to the age of 70 next birthday

• Minimum sum assured

• Up to the age of 40 - £30,000

• Over the age of 40 - £20,000

• Maximum sum assured - £500,000 • Both pay out in the event of death or on diagnosis of a terminal or a specified critical illness. (A terminal illness claim must be notified to us at least 18 months before the end of the policy term) • Both policies can be written in trust if required. • Both polices can be taken out on a single life or joint life first death or diagnosis basis • Premium payment is by monthly direct debit only • Once confirmed terms have been offered, confirmation can be faxed to your solicitor or lender if a mortgage is involved • Your premium can change during the term of your policy There is no surrender value or cash-back at the end of the policy term - it merely expires as it is a protection only policy

Link to previous articles: Direct Line Critical Illness Cover Overview Directline European Breakdown Cover: Travel claims FAQ Directline European Breakdown Cover: Travel claims Directline European Breakdown Cover Summary Directline Travel Insurance: European Breakdown Cover Directline Tradesman Business Insurance: Assumptions made