Critical Illness guide

Critical illness is something that, quite understandably, most of us would prefer not to talk about. But getting the right critical illness cover in place is the only way the subject can be avoided with total peace of mind.
So what is critical illness cover all about and how does it work?

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What does critical illness insurance cover?

Critical illness insurance pays out, typically a tax-free lump sum (or a regular benefit in some cases), if you survive more than 28 days from contracting one of number of serious illnesses listed on your policy. But be warned, as these can make for a depressing read.

All critical illness insurance policies cover seven core conditions as set down by the Association of British Insurers (ABI). These are cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. Critical illness insurance will also pay out if you are permanently disabled as a result of injury or illness.

The number and type of illnesses beyond these core conditions will depend on the individual policy so it’s crucial to read the terms and conditions carefully and know exactly what you are covered for prior to signing up.

To ‘successfully’ claim against a critical illness policy your condition will have to meet some grim criteria, which will also be listed in the terms and conditions. 

They may state for example that blindness should be ‘permanent and irreversible’, cancer excludes ‘advanced cases’ and that Parkinson’s disease should be ‘contracted before the age of 60’.

Critical illness exclusions

It's important to make yourself familiar with any exclusions in your critical illness plan as the insurer will refuse to pay out if you suffer from an illness or condition listed in this section of the terms and conditions.  Typical exclusions include self-inflicted injury, HIV and AIDS related illnesses and injuries caused whilst taking part in some hazardous sports, such as boxing or off-piste skiing.

Do I need critical illness insurance?

Whether critical illness insurance is worth paying for will depend on your circumstances. You will need to ask yourself how you, or a partner and/or dependants would manage if you were unable to work for a long period of time.

It might be that your partner could continue to bring in an adequate income; you may have willing and able family close by who would look after you; or you might even have enough in savings to look after yourself.

In any of these cases however, bear in mind that critical illnesses can be expensive in their own right in terms of equipment required or payment for carers. You may also need to be looked after by a family member who would subsequently no longer be able to work.

You might also already have critical illness cover that you weren’t aware of. Some life insurance policies incorporate this cover and will usually be labelled as ‘life and critical illness cover’.

These policies will pay out only once on whichever event happens first – whether you die or contract a serious illness. You may also have critical illness cover in place as part of a package of benefits at your place of work, so check with your employer first.

How much will critical illness insurance cost?

Quotes for critical illness cover will depend on a number of factors including your age and your family’s medical history. As an example, a healthy 30-year old man who is a non-smoker, taking out £150,000 worth of critical illness cover over 20 years, could typically expect to pay a monthly premium of between £20-30 but this does vary according to personal circumstances.

However, providers vary in their competitiveness so it’s important to shop around for the best deal. Make sure that in doing so, you don’t compromise on any cover you may need in the future and always read the terms and conditions thoroughly.

We can help you find the perfect policy by comparing a variety of policies and have a number of well known UK insurers on our panel.

To look for a life insurance policy with critical illness cover, why not click on the link below, or use the button at the top of the page to navigate to our comparison page.

Compare life insurance with critical illness cover