Critical illness
Critical illness cover can provide a financial lump sum if you’re diagnosed with a specified serious illness, helping you manage your finances while you focus on your health and recovery.
What is critical illness cover?
Critical illness cover is designed to pay a lump sum if you are diagnosed with a serious illness or medical condition covered by your policy during the policy term. To make a successful claim, your diagnosis must meet the insurer’s specific policy definition and, in some cases, you may need to survive for a set period after diagnosis.
The conditions covered and the criteria for making a claim can vary between insurers. Some illnesses may be covered from the point of diagnosis, while others may only qualify once they reach a specified level of severity or require certain treatments.
Critical illness cover is not a savings or investment product and normally only provides a payout when a valid claim is accepted.
How does critical illness cover work?
Choose the amount of cover and how long you need it for. You can select a level of cover based on your financial commitments and decide how long you want the policy to remain in place, for example until your mortgage is repaid or your children are financially independent.
Provide information about your health and lifestyle. When you apply, you’ll usually be asked questions about your medical history, family history and lifestyle. It’s important to answer these accurately, as incorrect or incomplete information could affect a future claim.
Your premium is based on your individual circumstances. Insurers consider factors such as your age, health, lifestyle, occupation, the amount of cover required and the length of the policy when calculating the cost.
Receive a lump sum if you make a valid claim. If you are diagnosed with a condition covered by your policy and meet the insurer’s definition, the policy can pay an agreed lump sum. The money can be used however you choose, such as towards mortgage payments, household bills, replacing lost income or additional care and treatment costs.
Policies may pay out once or provide additional benefits. Traditional critical illness policies usually end after the full benefit has been paid, although some policies may provide additional or partial payments for certain conditions. The exact terms vary between insurers.
Critical illness cover is different from life insurance. Critical illness cover is designed to provide financial support following the diagnosis of a specified serious illness, whereas life insurance is primarily designed to pay out if you die during the policy term. The two types of cover can often be arranged together.
The illnesses covered, definitions and level of benefits can differ considerably between providers, so comparing policies can help you understand which cover best suits your needs.
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What conditions are covered by critical illness insurance?
The illnesses and medical conditions covered by critical illness insurance vary between providers and policies. Even where the same condition is listed, the definition and severity required for a successful claim can differ, so it is important to check the policy wording carefully.
Some policies also provide additional or partial payments for certain less severe conditions. For example, a policy may pay a smaller benefit for an early-stage condition while allowing the main critical illness cover to continue.
Conditions commonly covered may include:
- Certain types and stages of cancer
- Heart attack
- Stroke
- Multiple sclerosis
- Parkinson’s disease
- Alzheimer’s disease
- Loss of a limb
- Permanent blindness
- Permanent deafness
This is not an exhaustive list, and the exact conditions covered will depend on the insurer and policy.
What might not be covered?
Being diagnosed with a named condition does not always mean that a claim will automatically be paid. Insurers use specific medical definitions, and some conditions must reach a certain level of severity before they qualify.
A claim may also be affected by circumstances such as:
- The severity of the condition – some policies require symptoms to be permanent or meet defined medical criteria.
- Pre-existing conditions or symptoms – conditions, symptoms or medical investigations that existed before the policy began may affect your cover.
- Age restrictions – cover for certain conditions may change or end once you reach a particular age.
- Policy exclusions – some policies contain exclusions relating to particular activities, circumstances or causes of illness.
- Waiting or survival periods – depending on the policy, you may need to have held the cover for a minimum period or survive for a specified time following diagnosis before a benefit is payable.
Terminal illness cover is different from critical illness cover and is often provided as part of a life insurance policy rather than as a critical illness benefit.
Because definitions and exclusions can vary considerably between insurers, it is important to compare more than just the number of conditions listed. The quality of the definitions and the circumstances in which a policy will actually pay out are equally important.
Compare critical illness cover
Comparing critical illness policies can help you find cover that matches your needs and budget. The conditions covered, policy definitions, payout amounts and additional benefits can vary between insurers, so it’s important to look beyond price alone. We can compare policies from a range of leading UK insurers to help you find suitable protection for you and your family.