Is critical illness cover worth it?
Key takeaways
Critical illness cover is a type of protection product that provides financial support if you’re diagnosed with a serious illness
This cover provides a tax-free lump sum payment upon diagnosis of a specified serious illness and can be used to cover debts, home adaptations, or daily living expenses
Policies usually cover cancer, heart attacks, and strokes, with more comprehensive policies covering many other conditions too
Pre-existing health conditions may not be covered - so check the policy wording
Do I need critical illness cover?
You might need critical illness cover if you'd struggle to pay your bills if you were unable to work due to a serious illness or medical condition.
Critical illness cover typically provides a tax-free lump sum payment that can be used for a variety of needs, such as covering debts, private medical treatment, or simply managing day-to-day living expenses during a difficult time.
Critical illness cover might not be suitable for everyone in every circumstance. Often, other types of insurance might be a better option.
When you might need critical illness:
You're the main breadwinner for your family
You wouldn’t have enough savings to cover your living costs if you couldn’t work
You don't have workplace benefits such as long-term sick leave
You're only eligible for statutory sick pay
You have financial dependents
You are a stay-at-home parent
When you might not need critical illness:
You don't rely on an income from working
You have a partner or family member who can support you
You have enough savings to cover your living costs if you couldn’t work
You already have cover via your workplace benefits
Is critical illness cover worth it?
Deciding whether a critical illness policy is a worthwhile investment depends on your personal circumstances and financial situation.
Things to consider before taking out cover include:
Your financial situation: What expenses would you need to cover if you couldn't work?
Your employment situation: What benefits does your employer offer?
Your personal situation: Does your partner rely on your income or do they support you financially?
Your savings: How much money do you have saved?
Your health: What health conditions do you have?
As with all insurance policies, there are critical illness cover inclusions and exclusions to be aware of.
What are the pros and cons of critical illness cover?
Pros
Peace of mind if you don’t have substantial savings: For those without financial support, critical illness cover can offer reassurance if you're diagnosed with a serious condition
Financial security: If you have debts and are unable to work due to illness or disability, this cover can help you meet your financial obligations
Taking care of your family: If you have a family relying on your income or non-paid labour (i.e. childcare), critical illness cover can provide financial support
Cons
Not all illnesses are covered: It’s important to note that not every illness will be covered by your policy, and cover is often dependent on the severity of the illness
Can be expensive: Premiums can be higher for those who are older or have lifestyle-related health risks
Already have an employee benefits package: If your employer already provides benefits for serious illness, you might not need additional cover
You should compare critical illness with other types of cover such as income protection insurance, private medical insurance and life insurance before you decide to buy it.
How much is critical illness cover?
The average monthly cost of a life insurance policy with critical illness cover is currently £44.11
The cost of critical illness cover varies and is influenced by factors such as the amount of cover you take out, your health, age, location and lifestyle.
It's important to keep in mind that premiums must be paid on time, or the coverage lapses and your policy ends.
There's no cash-in value if you don't end up using the cover. This means you won't get any money back at the end of the term or if you stop the policy early.
How much critical illness cover do I need?
The amount of critical illness cover you need really depends on your personal circumstances – there isn’t a one-size-fits-all number. A good way to think about it is: how much money would you and your family need if you couldn’t work due to a serious illness?
Key factors to consider:
Outstanding debts – e.g. mortgage payments, loans, or credit cards.
Household bills – everyday living costs and outgoings for your family (food, bills, childcare costs, transport).
Lost income – how long you could survive without your salary, especially if sick pay or savings are limited.
Medical and lifestyle costs – treatment, recovery, or adjustments such as home modifications or reduced working hours.
Existing protection – any savings, employer benefits, or other insurance policies you already have.
When should I get critical illness cover?
Premiums are generally lower when you’re younger and in good health, and you’re less likely to be excluded for pre-existing conditions.
Most people consider it at key life stages, such as:
Buying a home – to ensure the mortgage could still be paid if you became seriously ill.
Starting a family – so there’s financial support for your partner or children if you can’t work.
Relying on one main income – if your household depends heavily on your salary.
Changing jobs – especially if you’re losing employee benefits like sick pay or insurance.
What must I tell my insurer before I take out critical illness insurance?
Before taking out a policy, you must disclose your medical history and your family medical history (i.e. any conditions parents or siblings have suffered from). Failing to disclose relevant medical conditions or terminal illness could result in your cover being invalidated.
While pre-existing conditions might increase your premium, they can still allow for coverage. Sensitive medical information can be sent directly to the insurer's medical officer to maintain privacy.
What is the difference between life insurance and critical illness cover?
Both life insurance and critical illness cover provide a tax-free lump sum amount of money to protect you and your loved ones should the worst happen. The key difference between life cover and critical illness insurance, however, is the stage at which a payout is made.
Life insurance: Provides a payout to your beneficiaries upon your death
Critical illness cover: Offers a lump sum upon the diagnosis of a serious illness
People often buy both types of insurance together to ensure they are fully protected.
What's the difference between income protection insurance and critical illness cover?
Income protection insurance is a type of policy that provides you with a regular monthly income if you’re unable to work due to illness or injury, and sometimes unemployment too.
Unlike critical illness cover, which pays a lump sum for specific serious conditions, income protection is more flexible – it covers a wide range of health problems (from stress and back pain to serious illnesses) and pays out until you can return to work or until the policy ends.
What types of critical illness cover are available?
Critical illness cover comes in several forms from various insurance providers. You can choose a standalone policy (pays a lump sum for illness only) or add it to your life insurance policy for an extra cost.
Combined cover pays out once on either death or critical illness, while additional cover allows separate payouts for both.
Policies can also be level (fixed payout), decreasing (payout reduces over time, often tied to a mortgage), or increasing (payout rises with inflation). The right option depends on whether you want to protect a mortgage, replace income, or provide a fixed lump sum for your family.
Some people buy critical illness cover after taking financial advice from a financial adviser.
How can I find the best deal for me on critical illness cover?
MoneySuperMarket can help you compare critical illness quotes from 15 providers and find the best deals in minutes to give you peace of mind about your and your loved ones’ financial security.
Buying critical illness cover through MoneySuperMarket can be useful because it lets you compare policies from multiple insurers in one place, so you can find the best balance of cover and cost.
Quotes show you the illnesses covered, payout terms, and exclusions side by side, making it easier to understand differences that aren’t always obvious. Using a comparison site can also save time and help ensure you’re not overpaying for the same level of protection.
Frequently asked questions
Why would critical illness not pay out?
A critical illness policy might not pay out if the medical condition diagnosed is not covered by the policy, or if the policyholder fails to provide the required medical evidence.
Additionally, a claim could be denied if the illness is diagnosed within an exclusion period specified in the policy or if false information was provided during the application process.
How long does it take for critical illness insurance to pay out?
A critical illness insurance claim usually takes around 8 weeks to pay out, as it requires you to provide medical evidence of your condition.
How likely is it my critical illness claim will be paid out?
It depends on the insurer and your specific situation.
Large insurance companies may include figures such as the claims paid ratio (claims paid divided by claims submitted) in their annual reports or financial statements. This gives a general sense of how likely claims are to be honoured.
Author
Collette Shackleton
Content Writer
Collette Shackleton is a highly skilled Content Writer who has over nine years’ experience creating helpful and engaging personal finance content for consumers. Collette shares her experience as a...
Reviewer
Emma Lunn
Personal finance expert
Emma has written about personal finance for almost 20 years, with a career spanning several recessions and their inevitable consequences. Emma’s main focus is helping people learn to manage their...
