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Critical cover for children

Childhood illness and disability is a very emotive issue. All of us would rather not think about what could happen and parents rarely want to plan for the consequences of something happening for fear of somehow making it more likely to occur.

However the impact of a child being diagnosed with a critical illness would dramatically alter a family&#39s lifestyle.

The first reaction to such news is to worry for the child themselves, not the financial impact, but families will inevitably have to face up to the knock on effects on their household income and expenses.

One parent may have to give up work to look after the child, which could reduce household income significantly.

At the same time there could be new expenses to meet, such as medical treatment, providing specialist equipment, any carer expenses and additional travel costs.

Without any insurance cover, these additional costs could force a family to remortgage or even move home to release equity at a time when there is already a high level of stress.

It is easy to see the financial implications of a child contracting a critical illness and advisers should make sure that families are protected by ensuring they have the right insurance cover in place.

The danger, though, is that some clients could feel that a sales pitch around their children&#39s health is little short of emotional blackmail. To overcome this concern, this very important cover has been made a standard feature in many critical-illness cover products, allowing families to cover their children at the same time as themselves.

Initially, children&#39s critical-illness cover was seen as a bit of a gimmick, an element of the contract that would never need to pay out, in short, an attempt by insurers to add something of perceived value to the product without any cost.

At Legal & General, however, we have seen the amount paid out in children&#39s critical-illness claims rise year on year.

This rise has been driven by an increase in cancer claims, which acc- ounted for over 80 per cent of children&#39s critical-illness claims for Legal & General last year.

Roughly one-third of all childhood cancers are leukaemia and 80 per cent of these are acute. A further 25 per cent of childhood cancers are brain and spinal tumours.

Therefore, the cancer claims being made will cause significant upheaval in a family&#39s lifestyle and the benefit provided by children&#39s critical-illness cover should not be underestimated.

We can see that children&#39s critical-illness cover is valuable. It is normally automatically included in the product and will cover all current and future natural children, stepchildren and adopted children.

The list of illnesses covered by children&#39s critical-illness cover will be broadly similar to the main policy list, so cover for children is comprehensive and, in addition, benefit can be claimed for more than once. The lump sum benefit will provide parents with capital to support their child and a claim for a child&#39s critical illness will not affect the main policy.

Although advisers might feel uncomfortable discussing children&#39s critical-illness cover with clients directly, it is important that this valuable cover is not forgotten within the sales process.

If a client has to take time off work to look after their critically ill child, a lump sum payment would be a real benefit to parent and child at a time when all looks bleak and emotional and financial support is needed the most.

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