So what is critical illness cover? We offer four tips on what it is and how you can use it to your advantage.

What is Critical Illness Cover? Four helpful tips for a great safety net


Suffering a serious illness probably doesn’t hold the top spot on your to-do list. However, in this age of improved medical awareness, it would be naïve to ignore the possibility that you could one day face a troubling diagnosis.

So: What is critical illness cover?

In short, critical illness cover acts as a safety net should you fall ill. With that in mind, we’ll take a look inside the ins and outs of critical illness cover. Namely:

  • What critical illness cover is;
  • What critical illness cover applies to;
  • Which illnesses can lead to a payout?

If you already have a policy or you’re thinking of taking one out, stay with us. Be sure to read to the end for our number one tip when you buy critical illness insurance.

4. How Critical Illness Cover works

Critical illness cover, often referred to as CiC, works similarly to term life cover in many ways (read more about term life cover here). As with term life insurance cover, CiC promises a potential (tax-free) lump sum payout. That’s what happens in the event of you receiving a diagnosis of one of several serious illnesses.

For this protection, you pay a monthly premium. We calculate this figure with an understanding of:

  • How much cover you want;
  • How long you want it to last for;
  • Several personal factors like age, smoking status and medical history.

And, as with term cover, the policy will have a specified life span and expiry date. Yet the key difference with CiC is the scenario necessary for a successful claim in which the insurer pays.

Each provider has detailed lists of illnesses and surgical procedures covered under their policy. If you come down with a critical illness or undergo a certain type of surgery, you can make a claim and the insurer pays a lump sum directly to you. The money is then yours, to do with as you wish.

Consequently, it could go toward:

  • Home renovations if your condition means you require more accessible living conditions;
  • Rehabilitation or physiotherapy, or;
  • Hiring a carer.

As a result, CiC can prove to be essential to a comfortable recovery and life post-diagnosis.

Meeting monthly payments

Critical illness cover isn’t only for people concerned about the financial implications of recovery from serious illnesses. Consider the following: you have important monthly obligations like rent, bills and loan or mortgage repayments to make. As you think about how you would cope if illness or injury left you unable to work, would you be in a position to cover those payments?

Critical illness insurance goes further than just rehabilitation from illness and could be just what you need to keep the lights on in an otherwise unfortunate circumstance.

When you're laid up from illness or injury, critical illness cover can help you take care of necessary costs.

3. Different types of payment

If you’ve ever looked at the conditions covered by various insurance companies, you’ll probably have noticed a difference in the severity of the illnesses the insurer pays out for. Some insurers could offer to pay out on both a:

  • Heart attack and a loss of limb;
  • Various types of cancer or loss of sight;
  • Stroke, or Crohn’s disease.

Obviously, none of these, even the ‘less severe’ conditions, are pleasant but the simple fact is that the impact on your life of some diagnoses will be greater than others. That’s why insurers tend to offer full payments for some conditions and partial payments for others.

In most cases, if you claim on a partial payment condition, either all or the remainder of your cover will continue after your claim. This way, if you’re stricken with a critical illness a second time, further down the line, you could still be protected.

Insurance options from life insurance to home insurance and even car insurance, usually have various types of cover available for the same purpose and Critical illness insurance is no different.

With certain critical illness cover payment plans, you can claim more than once should you need to.

Some types of cover are more suitable for those with pre-existing medical conditions. Some insurance companies specialise in more injury-related cover, whereas others focus more on illness and disability and others try to cover as many bases as possible.

It’s often best to seek advice so you can be certain your policy is right for you and your circumstances.

2. Comparing CiC and Terminal illness

If you’ve got term life insurance already you may have come across a service called ‘terminal illness cover’. It’s easy to confuse terminal cover with CiC, and it happens fairly often. Nevertheless, there are significant differences between the two that are important to note.

Terminal illness cover is often included as standard with term life cover. It stipulates that; should you be diagnosed with a terminal illness and given (usually) 12 months or less to live, you can claim on your policy yourself. This is usually used to take care of final expenses, help make remaining days more comfortable or maybe tick some big items off the bucket list.

1. First event Critical Illness Cover policies

Most providers offer the choice to take out either; separate life and critical illness cover, or combined policies.

Neither policy is better than the other. They’re dependent entirely on your individual circumstances. However, we’ve discovered that many people don’t actually know which type of policy they’re on or the implications thereof.

If you’ve got a combined life and CiC policy and had to make a claim on your Critical illness Cover, that would void the policy and leave you or your loved ones without protection when you pass away.

Likewise, if your cover is solely to pay the mortgage off, you might not need separate life and CiC policies.

As always, it’s important to seek professional advice and assess your individual circumstances. ‘Out of the box’ life policies are never a good idea, nor is just taking out the same level of cover as your partner or a loved one so bear this in mind when you consider critical illness insurance costs or any other insurance products.

Our advisors are authorised and regulated by the Financial Conduct Authority and always happy to offer you free, professional advice tailored to your circumstances and requirements. If you’d like to explore your protection options, book an appointment for a time and date suitable for you – we’re here to help.

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