What is critical illness cover?

This blog article will discuss what is Critical Illness cover? What this covers and the features of these type of plans. I will give a brief over view of this however, if you are thinking of taking out a plan it may be worth speaking to a Financial Adviser to ensure that you get the right cover for you. If you have not yet read it, please refer to my previous blog – What is Life Cover? This explains the basis of how this type of cover works.

What is a Critical Illness?

Critical Illnesses are life-threatening or serious illnesses. The most common of which are Cancer, Heart Attack and Stroke. Other examples of critical illnesses that may be covered within Critical Illness Cover are:

  • What is Critical Illness CoverAlziemers
  • Brain Tumour
  • Bladder Removal
  • Blindness
  • Carcinoma
  • Coma
  • Chron’s Disease
  • Deafness
  • Heart Valve Replacement/repair
  • HIV Infection
  • Kidney Failure
  • Liver Failure
  • Loss of Limb
  • Loss of Limb
  • Organ Transplant
  • Motor neurone disease
  • Multiple Sclerosis
  • Paralysis of a Limb
  • Parkinson’s Disease
  • Removal of an Eye
  • Rheumatoid Arthritis
  • Third Degree Burns

What is Critical Illness Cover?

Critical Illness cover is a type of insurance that pays out if you are diagnosed with a specified Critical Illness. The policy conditions will list and give details of the conditions that are covered under your policy. Critical Illness Cover Plans usually pay out a lump sum which is tax free. Such plans are usually tied in with Life Cover such as Term Assurance and Family Income Benefit plans.

There are no restrictions on how you spend the money you receive for the pay-out from a Critical Illness plan. This could be used to pay off your mortgage, make changes to your home, cover lost earnings or go on a holiday of a lifetime.

Some plans will also include cover if a child is diagnosed with a Critical Illness at no extra cost. The amount is usually based upon your sum assured to a maximum amount.

When will the plan pay out?

Different policies will cover a number of critical illnesses and not all will cover the same ones. Moreover, each provider may have a different definition of the illnesses they cover and the trigger for the pay-out. It is therefore very important to understand what is covered under your policy and the cheapest isn’t always the best because it may cover limited critical illnesses.

Plans usually pay out on the diagnosis of a critical illness. However, you should check the policy conditions to make sure as some may pay out based upon the severity of the illness or on certain treatments being performed. For example, some forms of cancer will not trigger a pay out if they are easily treatable or if they are of a low severity.

Most policies will make one Critical Illness Cover pay-out however some providers will make small payments for specific illness which will not affect the sum assured (the amount of cover you have).

The policy will only pay out if you are within the plan term and have maintained the premiums. It is therefore important to ensure these are affordable at outset.

How much does Critical Illness Cover cost?

The cost of the cover will depend on a number of factors including:

  • Your age
  • Your state of health
  • The plan term
  • If you smoke
  • Any previous conditions
  • Family History

The older you are, the more expensive the cover due to an increased likelihood of claiming.

Critical Illness cover is also much more expensive than straight life cover as it is much more likely that you will be diagnosed with a critical illness cover than die within the policy term.

For example, if we take our 30 year old male non-smoker, for £100,000 of Life or Critical Illness Cover, the monthly cost would be £27 per month compared with £6.50 for life cover only. It is no cheaper to take out stand-alone Critical Illness Cover (The Exchange, December 2017).

You must be truthful on your application and provide full disclosure. The most common reason for claims being refused is non-disclosure on application.


 Critical Illness cover pays out an amount or amounts on diagnosis or treatment of specific medical conditions. Although on face value, it appears to be a simple insurance contract, different policies will have different features and benefits. It is important to speak to a professional who can advise you on the most suitable plan to meet with your requirements.

In my next articles, I will look at the following:

  • Do I need life cover?
  • Do I need Critical Illness Cover?
  • Should I review my existing Critical Illness Cover?
  • What is Income Protection?
  • How Much Cover do I need?

If you would like to discuss your life cover requirements, contact me for a complimentary no obligation initial meeting.




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