Critical illness cover is a type of insurance designed to help protect against the financial impact that a serious illness could have on you and your family.
It pays out a tax-free cash lump sum should you fall ill with a critical illness that’s listed on the policy, such as certain cancers, a heart attack or stroke.
The money can help replace lost income if you can’t work because of your illness. You can use the money to pay for whatever you like. For instance, you might want to use it for household bills, loan or mortgage payments or health-related costs such as installing adaptive equipment in your home to help you cope with your illness, or even to pay for private healthcare treatment.
You can take out critical illness cover alongside a life insurance policy (known as integrated cover) or on its own as an independent policy.
You pay a monthly or annual premium for the cover. If you buy it as part of your life insurance, the cost is included in your life insurance premiums, but you can see how much extra it’s costing you.
Your provider will have a specific list of illnesses that are covered. If you’re diagnosed with any of these conditions, your cover will pay out. If you get an illness that’s not on the list, you won’t receive the money.
Some critical illness policies include cover for your children if they’re diagnosed with a listed serious condition too. Or you may be able to pay more to include family cover on your policy.
Critical illness cover pays out its main benefit once, then the policy ends.
It doesn’t matter who you are, or how old you are; anyone could fall ill with a critical illness at any time. If that illness leaves you unable to work, then having a back-up plan in place can at least help you cope with the financial side of things while you have treatment or recover from your illness.
So, you might want to consider critical illness cover if:
Before buying a critical illness insurance policy, just check you’re not already covered under an existing life insurance policy such as mortgage payment protection cover.
The cost of your policy will depend on a few factors including:
When choosing the sum assured (how much you’d like to receive if you needed to claim), you’ll need to take into account all your outgoings. Include things like your mortgage or rent payments, loan repayments, childcare costs, monthly bills and so on. Consider any savings you could dip into, plus whether you're entitled to employee or state benefits, and you’ll have a clearer idea of the amount of cover you should choose. The larger the payout you opt for, the more expensive the premiums
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You can expect certain cancers, heart attacks, heart disease and strokes to be covered by all critical illness policies.
Policies could cover over 50 types of critical illnesses including permanent disabilities, multiple sclerosis, Parkinson’s disease and organ failure.
You should check the providers policy documents to see what is covered.
Not all conditions are covered in critical illness insurance policies.
And an illness might have to be particularly severe or leave you permanently impaired to qualify for a payout.
For example, some less advanced cancers which haven’t spread or reached a specific severity are likely to be excluded.
You may also only qualify for a payout if you’ve received certain medical treatment for the condition, as specified in the policy.
Pre-existing conditions and illnesses that arise as the result of a pre-existing condition might also be excluded. Plus, hereditary diseases, temporary illness, illness caused by drug or alcohol misuse, injury that’s self-inflicted or the result of taking part in a hazardous sport.
Check the terms and conditions of your policy carefully before deciding if it’s right for you.
You can compare life insurance and buy critical illness cover through us as a standalone policy or as an integrated policy.
We only offer critical illness cover with level term life insurance. It isn’t available to buy with decreasing term policies.
You can buy critical illness as standalone cover, without life insurance attached to it.
It protects you against the financial impact of being diagnosed with a critical illness, but it won’t pay out if you pass away
You can buy critical illness cover integrated with life insurance. With an integrated policy, you get a payout if you die, have a terminal illness or if you’re diagnosed with a critical illness. In many cases, integrated cover isn’t usually much more expensive than standalone cover
With decreasing term life cover, your payout lowers over time as the size of your mortgage, or other debts, decreases too. For that reason, it tends to be cheaper. You can’t buy critical illness cover with decreasing term life insurance through us.
With level term cover, the size of the payout you’d receive remains the same over the term of the policy
Each insurer will list the illnesses it covers in the policy documents. This’ll vary between insurers, so be sure to check.
For your insurer to pay out, your illness also needs to be of a certain degree of severity. Again, your policy documents should explain how severe an illness needs to be for the insurer to pay out.
Common conditions included in critical illness cover are:
Whether you’re buying an integrated or independent policy, it’s a good idea to shop around and compare prices to find the right policy for youCompare cover
These other types of cover can also provide financial payouts if you fall ill:
If you can’t work because of illness or injury, this type of policy will pay you a monthly income. The amount you receive will either be a fixed monthly amount or will cover a percentage of your gross annual salary (normally up to about 70%). You can buy long-term or short-term IP policies
This type of cover covers your monthly repayments on a single debt - like a mortgage, credit card or personal loan - if you have an illness or accident that leaves you unable to work
In a similar way, this form of IP is designed to cover loan repayments. But, unlike PPI, it’s not tied to one particular debt. You can use the monthly payments to pay off any debt you choose, whether it’s your mortgage or credit card repayments. The amount of cover can usually be up to 70% of your gross annual income and payouts will normally be tax free
MPPI covers the cost of your mortgage payments if you find yourself unable to work due to accident or illness. Most MPPI plans will pay out for a maximum of 12 months, though there are a few that will cover payments for 24 months
To apply for critical illness cover, you’ll need to tell us:
Give up smoking, exercise regularly, achieve a healthy weight and eat well
Buying cover as an integrated policy with life insurance can keep costs down
As the amount of cover you have decreases over time, it can be a more affordable option
Whether you’re buying an integrated or standalone policy, it’s a good idea to shop around and compare prices to find the right policy for you
Covid-19 isn’t considered a critical illness, so it won’t be covered. If you were to develop severe complications which lead to a secondary illness, like respiratory failure, multiple organ failure or septic shock, you could be.
If you have life insurance and the worst was to happen because of coronavirus, then you would be covered.
If you take out critical illness cover as an integrated policy, it will last as long as the term of your life insurance policy. Remember that if you make a critical illness claim on an integrated policy bought through us, the life insurance sum paid out when you pass away will be reduced.
When you take out critical illness cover as a standalone policy, you choose how long you want the policy to last.
Many people opt for cover that lasts at least until they’ve finished paying off their mortgage or their children leave home and are independent.
Policies may have a minimum and maximum term length to watch out for.
Yes, the illnesses covered by different insurers and policies can vary. You may also find that some insurers will pay out for less severe illnesses where others won’t.
Some critical illness policies may make a partial payment (a percentage of your amount of cover, up to a maximum amount) for less serious conditions, including things like low-grade prostate cancer. In these circumstances, your policy usually continues with the full or a reduced amount of cover.
Some policies also offer ‘enhanced condition’ cover where they’ll pay an additional amount above your level of cover for certain conditions that have a bigger impact on your life. For example, permanent and irreversible blindness, brain injury, loss of or paralysis of a limb following an accident.
Critical illness cover pays out if you’re diagnosed with a specified critical illness.
Terminal illness cover pays out if you’re diagnosed with a terminal illness that your hospital consultant expects will lead to death within 12 months. This type of cover is often included in a life insurance plan.
It depends on your circumstances, but the right IP policy can be valuable as a standalone product or as an addition to life insurance/critical illness cover.
It’s designed to pay out a percentage of your normal monthly earnings (usually between 50% and 70%) until you’re well enough to return to work after an illness or injury.
Life insurance won’t provide cover if you can’t work due to illness or disability. And IP policies can cover conditions that aren’t included in a critical illness insurance policy, like a bad back or depression.
If your payments stop, then most insurers will cancel your policy after a certain period (usually 30 days) but check your policy wording.
If you accidentally miss a payment, get in touch with your provider immediately.
To be eligible for critical illness cover you need to be a UK resident when you apply.
You may also find that there are maximum and minimum age limits.
Depending on your medical history and any pre-existing conditions you have when you apply for cover, some conditions may be excluded from your policy.
Some insurers may not accept you for critical illness cover if you’ve already been diagnosed with certain conditions, as you could be at risk of further illness.
No, if you make a successful claim on your critical illness policy, you’ll receive a one-off, tax-free lump sum.
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