Critical Illness Cover by

Critical Illness Cover

Life takes unexpected twists and turns, and sometimes your health can be impacted to the point where you may have to take an extended period off work. Critical illness cover is an insurance plan that’s designed to help you supplement your loss of earnings in the event that you are impacted by a terminal or life-threatening illness, injury, or disability. Read on to find out more about how this type of insurance can protect your family’s finances in a crisis.

What is Critical Illness Cover?

Critical illness cover (also known as terminal illness insurance or cancer insurance) is a long-term insurance policy that will pay out if you develop a life-threatening illness that prevents you from working. Each Critical Illness Cover policy outlines a range of serious medical conditions you can claim for, should you fall ill and be unable to work or get a terminal diagnosis. Once a successful claim has been made, you will get a single tax-free lump sum payment that can be used to pay your bills while you concentrate on getting well again and spending time with your loved ones.

Key features of life insurance and critical illness cover

  • Pays out a single, tax-free lump sum payment if you are diagnosed with a terminal or life-threatening illness
  • Many insurers covering critical illnesses list around 30 -40 medical conditions that policyholders can claim for, such as cancer and heart disease.
  • You can get a single or joint critical illness policy, and some policies can include your children on the plan.
  • This type of cover is designed to pay out a substantial sum of money once, and then the policy will end.
  • You may be accepted onto a critical illness plan if you have a pre-existing medical condition.

What's the difference between Life Insurance and Critical Illness Cover?

Life and critical illness cover are similar in that they will pay out a single lump-sum payment. However, with critical illness cover, you can claim when you develop a serious or life-threatening illness to make sure that your loved ones can make ends meet. They will not have to wait until you pass away to make a claim.

Life insurance with critical illness cover can be bought together as one dual policy package. This can be very useful for those who want to make sure that their family finances are secured for a range of different scenarios.

However, if you already have life insurance, you can also purchase stand alone critical illness cover to make sure you are fully protected financially.

How Does Critical Illness Cover Work?

Critical illness cover varies from insurer to insurer in what health conditions they can cover. Some companies list up to 40 medical conditions covered by one plan. These may include;

  • Cancer
  • Heart disease
  • Organ failure
  • Stroke
  • Parkinson’s disease
  • Multiple sclerosis

Some plans will also let you add specific conditions to your critical cover plan for an extra charge.

Should I get Critical Illness Cover?

There are many different factors you should consider before taking out critical illness insurance. For example, suppose you have already suffered from a serious illness, or you have a pre-existing medical condition. In this scenario, you may need to undergo a medical examination or provide proof of remission before your application can be accepted.

Next, you should also check your employment contract to determine your entitlements to sick pay for long-term health issues. This type of cover also does not affect your ability to claim government benefits.

Finally, it would help if you also looked at the terms of each policy and how quickly you can get a payout once you have a diagnosis. A critical illness insurance payout will not be subject to income tax. However, if you pass away before the money is paid out, it may be subject to inheritance tax (if your estate is worth more than £325,000). In this scenario, you may be able to put the sickness insurance in Trust and class it as being outside of your estate.

How Much Critical Illness Cover Do I Need?

To get the best critical illness cover for you, you should consider how much money you will need to ensure that your loved ones can stay financially afloat if the worst ever happened to you. When you are suffering from a serious illness, you need to make sure that you are not adding on the extra stress of financial worries, and instead concentrating on getting yourself better or even (sadly) saying your goodbyes to your nearest and dearest.

You can also factor in the cost of specific plans that protect your children until the age of 23 as an added extra to your critical life insurance policy.

When it comes down to seeking income protection vs critical illness cover, ultimately, the idea is to make sure that you have all of the worst-case health scenarios covered. You may want to think on both a short-term and long-term basis, how would my family cope if I could not work again or if I lost my life due to a serious illness, would state benefits be enough for them to live off?

How much does Critical Illness Cover cost?

Critical illness insurance premiums are calculated on your risk of developing any serious illnesses listed on the plan. This means that when you apply, you will need to answer honestly a series of questions related to your weight, lifestyle, and overall health. Naturally, if you smoke, or have a high BMI, or family history of a specific illness, you will be more at risk of falling ill, and therefore, your premium payments may be higher. Age also plays a key factor in securing cheaper cover, as the younger and healthier you are, the less you will pay every month for cover, as illustrated below.

Average critical Illness Cover costs for a non-smoker with a healthy BMI and no pre-existing conditions

AgeLife and critical illness insurance (per month)Life Insurance premiums (per month)

Frequently Asked Questions

Critical illness cover will pay out if you have a specific illness that you may recover from in the future. In contrast, terminal illness cover may only release a payout if you get a terminal diagnosis from your doctor.

As mentioned previously, each insurer will have a different set of illnesses that can be covered within their critical illness plan, anywhere from 30 -40 various illnesses. Also, one of the disadvantages of critical illness insurance is, if you have a pre-existing medical condition, some policies may exclude you from claiming under that specific condition. However, some specialist providers can still help you.

It is also worth noting that some insurers won’t accept you onto a specific sickness insurance plan if you have a family history of a particular disease (such as Parkinson’s disease), or you may have to pay a higher premium to get protection.

If you are looking for help paying the bills if you become too unwell to work for a shorter period and likely to recover fully, you may wish to look for income protection insurance or mortgage protection insurance. These policies work similarly to critical illness policies, but the payouts are smaller and designed to help you replace up to 65% of your expected monthly income.

Critical illness cover is designed to be a long-term insurance plan that can run alongside a life insurance policy or a critical illness cover-only plan. You can purchase this insurance product as a Whole of Life or Life Assurance policy (which runs until you die), or you can buy it over a set term (such as 5 or 25 years).

Once you have claimed on your policy, your critical illness coverage will end, and only your agreed life insurance payout will continue for the remainder of the policy term.

Once you are signed up to a critical life cover plan, making a claim is relatively easy. You should contact your insurer when you get a diagnosis, and they will then verify that information with your GP and get back to you with your lump sum payment within around eight weeks.

Why Use

Since our launch in 2015, we have helped over 500,000 UK mums towards protecting their family with affordable life insurance and protection products. Every 22 minutes, a child loses a parent they depend on financially, but despite this over 12% of UK Mums still have no life insurance to protect their family if the worst happened.

It was clear there was a problem, yet no-one was talking about it, so we launched

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Meet our customers.

"Amazing service from start to finish for me and my family within two phone calls we are covered and have peace of mind that when my baby arrives in a couples of weeks she is protected. 100% recommended it was so easy and felt friendly instead of tick box. Kate our caller was lovely "

Stacey P - 15th March 2021

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