What is Critical Illness Cover?

Critical illness cover (also known as critical illness insurance), is a long-term insurance policy which covers you for a number of serious illnesses specified by your policy provider. If you get one of these illnesses the policy will pay out a tax-free lump sum designed to help pay for your mortgage, rent, debts, or modifications to your home (for example if you need wheelchair access).

It is a different kind of cover to life insurance, which pays out if you die.

What Conditions Are Covered?

Each policy will differ in terms of the specific conditions that are covered, but the following illnesses are usually included:

  • Stroke
  • Heart attack
  • Certain types and stages of cancer
  • Conditions such as multiple sclerosis
  • Kidney failure
  • Coronary artery bypass
  • Permanent disabilities as a result of illness or injury

What Conditions are NOT Covered?

Again, this will vary, but most policies won’t pay out for illnesses that were existing when you took out the policy. The policy also doesn’t pay out if you die.

Some types of cancer or early stages or cancer will not be covered, along with minor heart attacks.

Make sure you know exactly what your policy does and does not cover before you take it out.

What Does It Cost?

Your premiums will vary according to the following factors:

  • Your age
  • The total amount of cover you require
  • Whether you are or have ever been a smoker
  • Your general health (which includes things like weight and family medical history)
  • Your job and whether it poses risks to your health

If you claim, the policy pays out a one-off payment and then ceases. It does not make regular ongoing payments to replace income, so is totally different from income protection insurance.

Will I Have to Have a Medical?

Some insurers will require you to undergo a medical examination before they agree to provide you with cover. All insurers will require you to fill out a detailed form specifying your medical history, including any existing medical conditions in your family history.

Do I Need Critical Illness Cover?

The main consideration is whether you or your partner could afford to cover your essential outgoings if you were unable to work due to illness or disability. If you don’t have substantial savings behind you, you could find yourself relying on state benefits, which currently range from £70 to £100 per week, depending on your circumstances. A critical-illness policy would certainly be worth considering if this won’t be sufficient for you to live on.

Some people have a benefits package through their employer that will cover long-term illness and time off work. If this is the case then you are unlikely to need an additional critical-illness policy, but make sure you check the exact details of your cover before coming to that decision.

Want advice from a critical illness adviser? Get a quote here.