Some Illnesses Are More Critical Than Others

Your mortgage lender may offer you several financial products including critical illness cover. However, as they are not specialists in this field, you will probably find a better deal elsewhere.

The level of cover on offer is just as important as the premium when looking for critical illness cover. The policies from Nationwide and Alliance and Leicester are particularly limited according to Kevin Carr, who is a senior adviser at LifeSearch, a telephone and online life assurance broker. The Alliance and Leicester covers only eight critical illnesses, with Nationwide covering just 10, whereas the market leader, Swiss Life, covers 38.

Loss of speech, deafness, blindness, diabetes, Aids and Parkinsons are some of the conditions not covered by the two High Street names. Mr Carr says that it is not worth considering a policy, which covers less than 25 ailments.

An umbrella term included in all policies is 'total and permanent disabilities', This term means you are covered for any ailment, which prevents you from working permanently.

You need to be alert to the wording as some policies cover 'any occupation' whereas others only cover your 'own' occupation. You will not receive a payout under a 'any occupation' policy unless you are totally incapable of carrying out a job, however menial. Therefore Mr Carr advises you sign up for a 'own' occupation policy.

There are a range of companies as well as Swiss Life who offer comprehensive cover including Legal and General, Norwich Union, Standard Life, Scottish Equitable, Scottish Provident, Friends Provident, Liverpool Victoria, Skandia and Zurich Life.

For years life insurance has been promoted by mortgage lenders. This has resulted in critical illness cover never being considered by many people. There are four times as many claims on critical illness policies compared to life policies, when the consumer has taken out both types of insurance.

Life insurance cover is extremely important, especially if you have dependents, as they will welcome the lump sum payment on your death. However critical illness cover should be the priority if you have debts to settle, particularly a mortgage. Mr Carr considers critical illness to be more important as it covers the cost of your house and food, even if you are ill and unable to work.

The premiums will be higher if you are a smoker and will also rise if you are older. A decreasing term policy, which is targeted at people only wanting to cover the cost of their mortgage, is the cheapest. However, a level term mortgage, where the amount of cover remains the same, is recommended by Mike Boles, a director at Savills Private Finance. This is because aspiring homeowners are likely to need larger mortgages, which will require an increase in the amount of cover.

Vegetarians Given Life Insurance Carrot

At not-for-profit insurance business has launched a scheme which offers fish-eaters and vegetarians a reduced price life insurance policy.

The deal, believed to be the first of its type, is being pioneered by Animal Friends Insurance (AFI). The company is offering non-meat eaters a 6 per cent discount on insurance premiums

The firm claimed that vegetarians ought to pay less for the insurance cover, which pays out if the policyholder dies, because they were less likely to suffer from a range of chronic diseases, including some cancers.

Elaine Fairfax, AFI's managing director, claims that the risk of vegetarians being diagnosed with certain cancers is reduced by up to 40% and the risk of them suffering from heart disease is cut by up to 30%, but despite this they have, until now, had to pay the same life insurance premiums as people who eat meat.

She says that AFI think that this is unfair and says the life insurance industry should recognise the fact that being a vegetarian can create a very positive impact on life expectancy and cut its premiums accordingly.

A full-price policy is also on the market for meat eaters. Both policies are underwritten by LV=, which used to be known as Liverpool Victoria.

In common with standard life insurance policies, a range of factors contribute to the cost of the premium including whether the applicant smokes, their age, weight and sex.

At the moment, AFI is funding the 6% discount itself from the fee it receives from LV=. In the future, however, Ms Fairfax said the company's aim was to offer lower premiums on specialist policies. In offering the deal, the firm is hoping to sign up enough vegetarians to make it viable for LV= to underwrite another policy that takes the vegetarian's diet into account.

Indeed there are significant savings to be made, the discount reveals that a 40-year-old non-smoker purchasing £300,000 worth of cover might potentially save £393.60 over a 20-year period, says Ms Fairfax

Where life insurance is concerned, her company believes that insurers should begin to treat meat eaters and non-meat eaters in a way that is similar to the way they view smokers and non-smokers. Ms Fairfax hopes that other companies in the insurance industry will follow the initiative taken by AFI.

Cheaper Life Insurance For Vegetarians

An animal-friendly insurance agency which has hitherto specialised in pet insurance products has extended its range to offer cheaper life insurance policies to vegetarians. Married couple Chris and Elaine Fairfax of Worthing, West Sussex, founded Animal Friends Insurance (AFI) to provide protection for our furry friends, but they now also offer non-meat-eaters a Vegetarian Term Life policy. The question is, does it come with a side salad?

AFI considers that the insurance industry as a whole should recognise that vegetarians are healthier and live longer than meat-eaters, and they should factor that into their quotations. The claim for better health and longevity of vegetarians is backed up by research.

Mr Fairfax states, "Independent studies show that, on a 12-year follow-up study of 11,000 people, vegetarians have a lower rate of mortality in some significant areas than non-vegetarians."

It is said that they are less likely to suffer with kidney stones or gall stones, or other chronic illnesses. They are also less likely to have high blood pressure or to develop diet-related diabetes.

Needless to say Mad Cow disease isn't going to affect vegetarians, so dying for a hamburger won't be on their agenda.

The Vegetarian Society claims that their followers (some four million in the UK) reduce the risk of heart disease by 30 per cent and that the risk of some cancers is down by 40 per cent.

The Vegetarian Term Life policy is underwritten by the Liverpool Victoria Life Company and offers a first year reduction on monthly premiums of 25 per cent. Mr and Mrs Fairfax are so keen on promoting the policy that they are funding the discount by forgoing their commission. They have also decided that profits from their other insurance business will be donated to animal causes.