COVERLIFE

Critical Illness Cover

A tax-free lump sum if you are diagnosed with a condition your policy lists. The wording decides whether it pays, not the number on the brochure.

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The Thing Most People Get Wrong

Critical illness cover is usually bought bolted onto life insurance, as a single policy written to pay on life or earlier critical illness. Those four words matter more than anything else on the schedule. A policy written that way pays once. If it pays out on a cancer diagnosis, the cover ends there and your family has no life cover afterwards, at exactly the point when buying new cover has become expensive or impossible.

That is not a fault in the product, and for many households it is the right trade: one premium, one policy, cover when it is most likely to be needed. But it is a decision, and it should be a deliberate one. Two separate policies cost more and pay twice. Nobody should discover which they bought at claim time.

Why The Number Of Conditions Misleads

Insurers advertise condition counts, and they range from around forty to over a hundred. It is the least useful figure in the brochure. The Association of British Insurers publishes model wordings for the core conditions, which is why cancer, heart attack and stroke are broadly comparable wherever you buy them. Everything beyond that core is defined by the individual insurer, and a definition can be broad or narrow while carrying the same name on the list.

So a policy listing fifty conditions with generous definitions can be worth considerably more than one listing ninety with tight ones. The question worth asking is not how many, but what the wording says about the specific things you are worried about, which is usually shaped by what has happened in your family.

Total Permanent Disability: Two Very Different Definitions

Most policies include total permanent disability, and it is defined one of two ways. Own occupation pays if you can never again do your own job. Any occupation, or a work-tasks test, pays only if you cannot do any suitable job at all, which is a much harder bar. A surgeon who loses fine motor control has a clear claim on the first definition and very possibly none on the second.

Which definition you get depends on your occupation and the insurer, and it is not always offered. If your income depends on a specific skill, this is worth more of your attention than the price difference between quotes.

What To Check On Any Quote

•Does it pay once, or is life cover separate
•The survival period, in days
•Own occupation or any occupation disability
•Whether premiums are guaranteed or reviewable
•What it pays for early-stage cancer
•Whether children's cover is included

The Survival Period

Almost every policy requires you to survive a set period after diagnosis before the critical illness benefit is payable. Fourteen days is the most common figure, some insurers use twenty-eight, and a small number have removed the requirement. It exists so that the policy responds to surviving a serious illness rather than to dying of one, which is what the life cover is for.

The consequence is worth being blunt about. If someone is diagnosed and dies within that window, the critical illness benefit does not pay. On a combined life and critical illness policy the life cover answers instead, so the family is not left with nothing. On a standalone critical illness policy there is nothing to fall back on. It is a small number buried in the wording and it decides which of those two situations you are in.

Partial Payouts, And Early-Stage Cancer

Modern policies do not treat every diagnosis as all or nothing. Alongside the full benefit, most now make smaller additional payments for less advanced conditions, typically a proportion of the sum assured up to a cap, and typically without ending the policy. This is where the market has moved furthest in the last decade and where policies differ most.

Early-stage and low-grade cancers are the clearest example. Some are excluded outright, some trigger a partial payment, and a few meet the full definition. The same diagnosis can therefore produce nothing, a few thousand pounds, or the entire sum assured, depending purely on which wording you bought. Comparing headline prices without comparing this is comparing two different products.

Children's cover

Included as standard on most policies, usually at a lower sum assured, and it does not reduce your own cover when it pays. Check the age range and whether it continues if you change policy.

Guaranteed or reviewable premiums

Guaranteed premiums never change. Reviewable ones start cheaper and can be increased, often from year five or ten. Over a mortgage-length term the cheaper quote is frequently the more expensive policy.

Level or decreasing

Decreasing cover tracks a repayment mortgage down and costs less. Level cover stays put, which is what you want if the money is meant to replace income or pay for care rather than clear a loan.

Declaring your history honestly

Underwriting happens at application, not at claim. Answer fully, including things that feel irrelevant. A policy bought on an incomplete answer is the one that gets argued about when it matters.

What It Actually Costs

Critical illness cover starts from around £5 a month, subject to your age, health and lifestyle. That is the entry point across the mainstream UK market and it is what we can arrange, because our panel of 15 protection insurers includes the household names you will see on price comparison sites.

What moves it is age, whether you smoke, the sum assured, the length of the term and your medical history. Those matter far more than which insurer you end up with, which is why shopping on headline price alone tends to be a poor use of your time. As a rule of thumb, adding critical illness to a life policy costs several times what the life cover alone costs, because claiming on it during the term is a good deal more likely than dying during it.

If what actually worries you is being unable to work rather than a particular diagnosis, income protection is usually the better answer, and often the cheaper one. It pays a monthly income for as long as you are unable to work, whatever the cause, rather than a lump sum for a named condition.

Talk To Someone Who Reads The Wording

The differences that decide a critical illness claim are in the definitions, not the price. We go through them with you, on the conditions you are actually worried about.

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Recent cases

Real examples of cover we have recently arranged. Customer details are anonymised.

Life, critical illness and income protection

Combining four policies to protect a foster carer with high blood pressure

The situation

A foster carer came to us wanting to protect her family and her financial independence if she became seriously ill, could no longer work, or died.

If illness stopped her fostering, her fostering income would stop with it, and she would need another way to meet household costs. She also had high blood pressure and had recently had surgery.

What we recommended

•£100,000 of life cover with Vitality to age 75, including terminal illness benefit subject to the policy definition, to help her family with funeral costs, outstanding debts and housing costs.
•£50,000 of critical illness cover with Vitality to age 75, covering 114 conditions. The £50,000 is roughly a year's earnings, giving her a financial buffer during recovery. It pays the full £50,000 for a qualifying condition, or a reduced amount for a less severe one, depending on severity and the policy's claim definitions.
•Income protection combining policies from LV= and British Friendly, with a total selected benefit of £3,500 a month and cover to age 68. Cover started from day one, without a referral process or medical tests. Both policies have a 4-week deferred period, so payments begin once she has been unable to work for 4 weeks, and pay out for up to 2 years in total for any one claim.

The outcome

Four policies covering three needs: life cover for her family, a critical illness lump sum, and a replacement income if she cannot work.

Her high blood pressure and recent surgery were considered during underwriting, and under the accepted terms no specific exclusions were applied for those disclosed conditions.

Income protection payments remain subject to each policy's waiting period, claim terms and financial limits, including how benefits from the two policies interact. The policies' standard terms and claim requirements still apply.

Every case is different. The cover, terms and premiums available to you depend on your circumstances and each insurer's underwriting.

Cover that often goes with this

The gaps we most often find sitting next to this one.

Common questions

What is critical illness cover?+

A policy that pays out if you are diagnosed with one of the serious conditions it lists, while the policy is running. It is designed to give you money to live on and cover your commitments at a point when working may not be possible. It is separate from life cover, which pays out on death.

What does critical illness insurance cover?+

Each insurer publishes its own list of conditions, and the lists differ, which is why comparing them matters more than comparing price alone. Cancer, heart attack and stroke appear on essentially every policy. Beyond those the range varies widely, and some insurers cover early-stage conditions that others do not. We go through the actual definitions with you rather than the headline number.

How many critical illnesses are covered?+

Anywhere from around forty to over a hundred, depending on the insurer, and the number is the least useful thing on the brochure. A policy listing fifty conditions with broad definitions can be worth more than one listing ninety with narrow ones, because the definition decides the claim and the count does not. Ask what the wording says about the conditions you are actually worried about.

What illnesses are covered by critical illness cover?+

There is no single answer, because the covered conditions are defined by each insurer in its policy wording, and the definition matters as much as the name. Two policies can both list a condition and pay out differently on the same diagnosis. The Association of British Insurers publishes model wordings for the core conditions, which is why cancer, heart attack and stroke are broadly comparable across the market, and why everything beyond them is not.

Is there a survival period on critical illness cover?+

Usually, and it catches people out. Most policies require you to survive a set period after diagnosis before they pay, commonly fourteen days, though some insurers use twenty-eight and a few have removed it. If you die inside that window, the critical illness benefit does not pay, and whether anything pays at all depends on whether the policy also includes life cover. It is worth checking the number on your own wording.

Can you get critical illness cover without life insurance?+

Yes. It can be arranged as a standalone policy, though many people take it alongside life cover because the combination is often cheaper than two separate policies. Which makes sense depends on what you are protecting and who depends on you, and on whether you are comfortable with a combined policy paying only once.

Does critical illness cover pay out more than once?+

Usually not for the main benefit. A combined life and critical illness policy is normally written to pay on the first event, so if it pays on a critical illness claim the cover ends and there is no life cover left afterwards. Separate policies avoid that, at a cost. Many policies do also make smaller additional payments for less severe conditions without ending the cover, which is a different mechanism worth understanding.

How does critical illness insurance work?+

You pay a monthly premium, and if you are diagnosed with a condition the policy covers and you survive any waiting period set out in the wording, it pays a tax-free lump sum. What you do with it is up to you: clear a mortgage, replace lost income, or pay for care and adaptations.

How much is critical illness cover a month?+

From around £5 a month, subject to your age, health and lifestyle. That is the entry point across the mainstream UK market and it is what we can arrange, because our panel of 15 protection insurers includes the household names you will see on comparison sites. What actually moves the price is your age, whether you smoke, the sum assured, the term and your medical history, all of which matter more than which insurer you end up with. Adding critical illness to a life policy typically costs several times what the life cover alone costs, because claiming on it during the term is more likely than dying during it.

Do I need critical illness cover?+

It depends on what would happen to your household if you could not work for a long period. If you have a mortgage, dependants, or little in the way of savings and no meaningful sick pay, it fills a real gap. If your employer provides substantial long-term sick pay and you have savings behind you, it may matter less. Income protection is often the better fit where the worry is being unable to work rather than a specific diagnosis.