Serious illness products on the Irish market list between 22 and 40 insurable conditions on their brochures, but it is worth remembering that just three illnesses give rise to most claims - cancer, heart attack and stroke.
Of more importance is how insurance firms define certain illnesses. The disappointment and anger that many claimants feel when their claim is rejected is one reason why Irish Life refers to its product as "specified" illness cover.
People who lose a leg or an arm in an accident will find that their policy will not cover them: most will only pay out if the policyholder loses two limbs, even specifying that the loss must be above a certain joint.
Similarly, kidney failure is defined as end-stage renal failure to both kidneys, requiring either a transplant or regular dialysis.
In the case of an angioplasty procedure, some companies specify that two arteries must have narrowed with a percentage blockage of at least 70 per cent.
Exclusions and deferred periods:
One common illness excluded on all policies in the Irish market is diabetes. Others not always covered are open heart surgery and pre-senile dementia, while some companies will not cover for Alzheimer's disease over a certain age. The usual "survival period" necessary after surgery or diagnosis to receive a payout is 14 days, but deferred periods of six months will often apply to multiple sclerosis, permanent loss of sight and permanent loss of hearing.
People who already suffer from certain conditions may find it difficult or impossible to get cover. One insurance broker tells the story of a client who approached a firm about taking out serious illness cover, but did nothing about it. In the meantime, the client had an angioplasty procedure. The life companies then told the broker that his client would not just be excluded for heart-related conditions, but would never get serious illness cover and would also have to wait a number of years to buy life assurance.
Index-linked cover:
An index-linked policy means that the sum assured will increase in line with inflation. The insurance company or broker will write to customers annually informing them that both the premiums they pay and the amount that will be paid out in the event of a claim will be adjusted upwards so the value of the policy doesn't decrease in real terms.
"Somebody could have taken out a policy for €100,000 about five years ago, because that might have been the recommendation then. But with inflation at 4-5 per cent, it could be worth 20-25 per cent less," says Mr O'Neill.
Companies do not index-link at the same rate, he adds. On some policies, the sum assured will increase by 5 per cent and premiums will cost the policyholder a corresponding 5 per cent more.
Others increase the sum assured by 5 per cent, but bump up premiums by 7-8 per cent. The initial premiums on these types of policy are often lower in order to attract new customers.
Convertible policy:
A convertible policy means the policyholder can extend the length of their cover. For example, a 55-year-old person may have 25-year term serious illness cover taken out at the age of 30 that is about to expire. If he or she wants to be covered up to the retirement age of 65, they can convert it into another 10-year policy.
They may pay a higher premium from the beginning because they are now older, but they should not be penalised or refused cover at this stage if their health has deteriorated in the meantime.
