Why cover?
  • affects 1 in 4 women / 1 in 5 men before retirement
  • 94.1% of the critical illness claims are paid
  • protect yourself and your family if you get seriously ill
Why us?
  • get the cover that will pay when you need it
  • save up to 35%, cover from £5 a month
  • free, fast and without obligation quotes
Insurers: Aviva, Legal & General, Liverpool Victoria, Scottish Widows, Vitality, Zurich

Return of Premium Benefits: Strengthening Your Critical Illness Insurance Policy

One key objection others have about getting a critical illness insurance policy is the belief that the possibility of getting critically ill is so small.

  • What happens to the premiums I paid, when the policy terminates or when I die without qualifying for a claim under the terms and conditions of the policy?”, they ask.
  • Or, “what happens if I can no longer afford to pay for the policy and will need to cancel it, do I lose all the previous payments I made?”, comes another objection.

Both are valid concerns. Of course, you are making an investment and you don’t want that investment to go to waste. You would want to see something of what you have paid out.

To strengthen your policy and to ensure that you get something, whether you are diagnosed with a critical illness or whether you continue to live a healthy life, you can opt to get the return of premium rider.

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Return of Premium Rider

This rider will ensure that you get back the premiums you have paid.

The instances when the return of premium benefit will kick in will vary from policy to policy, but usually these are the conditions where your premiums can be refunded to you:

  • You die while the policy is effective but the cause is not a covered critical illness. For instance, you die due to an accident.
  • Over 50s Critical Illness Cover. Return of premiums (in this case) is usually made available to Over 50 Critical Illness policies, where premiums are returned if the critical illness occurs during the first year or first two years of the policy. The reason for this is that these policies are guaranteed to be issued for applicants who answer “no” to standard health questions in the policy application.
  • Anniversary or age option. You can get a rider that guarantees a return of premium at a specified period in your policy. For instance, you can get a 15 or 20-year option where you stand to receive the premium refunds when the policy reaches the set anniversary. This is as long as the policy continues to be in force at the time of the anniversary.
  • Premium upon expiry of the policy. If the policy has expired at age 65 or 75 and no claim has been made, the premiums will be refunded to you.
  • Cancellations. Usually, you won’t get a refund if you cancel before the set anniversary when the refund is to be paid. The policy must also be in force for a set number of years.

The premium refund is usually the total premiums you have paid over time less any refunds previously paid. Other deductions will include any unpaid premiums. Make sure to check your policy contract to see whether this is included.

Pros and Cons of the Return of Premiums

Pros Cons
  • You can recover premiums paid after a specified period, for only a small additional premium.
  • You are assured that you receive something for your investment, whether you get diagnosed with a critical illness or not.
  • Exercising the Return of Premiums option means higher premiums.
  • You will have to wait for a specified number of years or for a certain event for the return of premiums to kick in.
  • This is only available in some providers.

Last updated on: 18.1.2013

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