What is critical illness insurance?

30 May2021

People sometimes find it difficult to think about critical illness cover . It is human nature to assume that - as long as you feel healthy at the moment - you will always stay healthy. You never know what could happen in the future, however.

The tricky thing about critical illness cover is the exact fact that you can never know what the future holds. Even if you are willing to buy critical illness cover, how will you know what illnesses you will need to be covered for? This article will provide some advice to point you in the right direction.


Critical illness cover is designed to pay out a tax-free lump sum upon the diagnosis of a critical illness that is included in your policy. This money can prove invaluable during an otherwise stressful time. It can help compensate for your loss of income, for example. Critical illness cover can be bought in conjunction with many life insurance policies. You can spend the payout however you like. Many people take out critical illness cover so they know they will receive help with their mortgage payments or childcare costs. Depending on your illness, the payout could also help buy specialist equipment to help you deal with your condition, or modify your home and car to make them more accessible.

Things to think about

  • Make sure you find a policy that covers a range of illnesses. Typically they all cover illnesses like cancer, heart attack, kidney failure, stroke and multiple sclerosis.
  • Read the small print. Many insurers cover cancer, but not in all of its stages for example. Make sure you know exactly what is and is not covered before you take out a policy.
  • Illnesses that are considered "self inflicted", for example by drug or alcohol abuse, are not covered by many insurers. You also may not be covered if you become ill or injured as a direct result of partaking in any extreme sports.
  • If you smoke, be prepared to pay more for your cover.
  • It may be beneficial to find a comprehensive policy that covers the majority of major illnesses. You may wish to avoid expensive policies that cover a huge range of diseases you will probably never be exposed to, however.
  • If possible, think about which critical illnesses you are more likely to get. Inspect your family's medical history. It is important to consider that if a close member of your family has a relevant medical condition it may affect the cost of your cover.
  • Many insurers that offer life and critical illness cover will cancel your policy if you make any successful claims. If you claim on your critical illness cover you may lose your life insurance.
  • Are your children covered? Some policies now cover your children at no extra cost. This is a benefit well worth exploring if you have children.
  • Existing illnesses are rarely covered and may hinder you in obtaining a policy.

For more information on Life and Critical Illness Cover click here.

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