A Guide to Critical Illness Cover

If you’re looking for an insurance policy to protect you financially if you’re diagnosed with a serious illness, critical illness cover could offer you some peace of mind. Here, we’ll cover how critical illness cover works in the UK, how it compares to other protections like life insurance, and where to get quotes with the lowest costs.

What is critical illness cover?

Critical illness cover (CIC) is a type of insurance designed to pay out a tax-free lump sum if you get diagnosed with a serious health condition. This means it can provide a financial safety net and allow you to cover expenses like paying off a mortgage, covering the costs of medical treatment, or simply providing your family some security.

How does it work?

When you take out a policy, you’ll decide on a level of cover (the size of your lump sum payout) and pay an ongoing monthly premium to maintain your critical illness cover. Typically, more expensive policies can be more comprehensive in terms of what’s covered and the potential payout.

If you’re diagnosed with an illness or condition specified by the policy (cancer, heart attack or stroke, for example), you can make a claim. If accepted, the insurer pays you a one-off lump sum to use however you choose. Most policies have a ‘survival period’ of around 10-14 days and automatically end after a successful claim.

What does critical illness insurance cover?

Each insurance provider will have their own lists of covered conditions, but typically, here are the most common conditions critical illness cover in the UK provides protection for:

• Cancer (usually depends on the type and severity)

• Heart attack, cardiac arrest, and stroke

• Parkinson’s and multiple sclerosis

• Blindness and deafness

• Dementia

• Kidney and liver failure (organ failure or transplant)

• Loss of limbs

• Motor neurone disease

• Severe burns

• Traumatic brain injury

However, the exact conditions covered will vary across insurers and levels of cover. It’s always crucial to familiarise yourself with the policy notes because, even if a broad condition is covered (cancer, for example), it may not cover certain diagnoses.

Types of policies available

Here’s a brief overview of the most common types of critical illness cover you’ll come across, each with its own intended uses:

Standalone critical illness cover

This can be a cheap way to get protection. It means you’ll only have critical illness cover, so you wouldn’t be covered if you were to die or if something unexpected happens that falls outside the policy coverage.

However, it can be an affordable way to get protection for certain illnesses and health conditions. You will also get a degree of control over how much cover you get and how comprehensive your policy is.

Combined life and critical illness cover

Combining life insurance and critical illness cover can provide the best value for an overall protection package. Some life insurance policies, particularly comprehensive whole-of-life insurance, will include critical illness cover as a benefit. If not, you can sometimes add it to a life insurance policy as an extra for a discounted cost.

If you’re looking to take out a decreasing term life insurance policy, perhaps to pay off a mortgage, you can usually get critical illness cover to run in parallel for the same fixed period. This way, your mortgage could get paid off if you became seriously ill or passed away.

Group critical illness cover

Companies usually provide this as a benefit for employees. It’s useful because, as an employee, you may not have to pay the premiums. However, group critical illness cover can sometimes be more restrictive in terms of the benefits and the level of cover provided.

As it can be a ‘one-size-fits-all’ protection policy, it may not give you the degree of coverage you and your family need, because your situation will be unique and likely different to someone else covered under the same group policy. Payouts from group policies may also receive different tax treatment from a personal policy.

How your application gets assessed

Here are some of the key areas insurers will look at when determining your eligibility and the cost of critical illness cover premiums:

• Age and health: General factors like your age, height and weight will play a significant role in your ability to get cover, and at what cost. The younger and healthier you are, the lower your premiums might be. But, alongside your health, insurers will also want to know about your family medical history.

• Lifestyle: Insurers will want details about your lifestyle habits, such as whether you exercise, how much you drink, and if you’re a smoker. You’ll also get asked about extreme hobbies or activities (for example, rock climbing or scuba diving), and if you’re involved with organisations like the military.

• Level of cover: Choosing how much cover you need will impact your premiums. For example, you might have a specific sum in mind, perhaps enough to pay off your mortgage. Some choose to multiply their annual salary by several years to estimate the right cover amount. It’s not an exact science, but a larger payout usually means higher premiums.

• Covered conditions: Opting for basic critical illness cover that only pays out for fewer conditions can be cheaper. Whereas, if you want a more comprehensive policy that covers a broader range of illnesses, you may pay higher premiums.

• Policy length: You’ll usually get the option to select how long you’d like for your critical illness cover policy to last. Typically, policies will last 10, 20, or 30 years - but it is possible to get longer policies, or critical illness cover that remains valid while you have an active life insurance policy in place.

• Your occupation: The cost at which insurers provide critical illness cover can depend on your job. For example, if you work in a potentially higher risk sector like the police, armed forces, or certain types of construction (perhaps working at heights or offshore), getting cover can be more complex or expensive.

• Premium structure: With some insurers, you can choose between guaranteed premiums (where the amount you pay stays the same), or reviewable premiums that fluctuate over time based on various factors.

• Children’s cover: Some critical illness cover policies include a limited amount of children’s cover as a standard benefit. But with certain insurers, it’s an optional extra that costs more to add on.

Get a critical illness cover quote online

If you’re looking to compare critical illness cover quotes online, you might find it complex and confusing. There are various factors that can impact your options and premiums, and the right policy will depend on your circumstances and needs.

An insurance adviser can quickly provide accurate quotes, often faster than online platforms. This is because they can easily determine the correct level of cover for your situation. They might suggest arranging a standalone policy, or perhaps bundle your critical illness cover with life insurance to ensure you have complete protection.

Ready for a free, no-obligation chat with an adviser specialising in critical illness cover? You can get started here:

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Is critical illness cover worth it?

Whether this cover is right for you depends on your financial situation and any existing protection you have. Here’s how critical illness cover compares against other types of insurance:

Critical illness cover vs income protection insurance

Critical illness cover pays a one-off lump sum if you're diagnosed with a serious condition listed in your policy. The money can be used for anything you like - paying off debts, adapting your home, or simply covering your living costs while you recover. Once you make a successful claim, the policy usually ends.

Income protection insurance, on the other hand, pays a regular monthly income (usually up to 70% of your salary) if you’re unable to work due to illness or injury. Income protection policies can pay out until you retire or for a specified period. Policies usually don’t end after a claim and might allow multiple claims for different illnesses or injuries.

Critical illness cover vs accident insurance

Accident insurance provides a lump sum payout if you suffer a physical injury from an accident - something like a broken bone, loss of a limb, or a serious burn.

Critical illness cover pays out for medical diagnoses, not for accidents or injuries. Usually, injuries aren’t covered by a critical illness policy unless a serious accident leads to a permanent condition (perhaps blindness or paralysis).

Critical illness cover vs terminal illness cover

Terminal illness cover pays out a lump sum if you're diagnosed with an illness that your doctor believes will result in death within 12 months. It’s often included as a standard benefit in many life insurance policies, allowing you to access all (or a portion) of the life cover payout early.

With critical illness cover, your condition doesn’t need to be terminal. The policy pays out if you're diagnosed with a serious illness from a predefined list. So, you might go on to live a relatively normal life after claiming, receiving treatment, and recovering.

Critical illness cover vs life insurance

Life insurance policies typically only pay out a lump sum when you die. So, the money goes to your beneficiaries (like your spouse, children, or other family members). Critical illness cover pays directly to you while you’re still alive.

Critical illness cover and life insurance policies are often used in tandem to offer complete protection in the event you’re diagnosed with a serious condition, or the worst was to happen and you were to pass away.

How much does it cost?

The cost of critical illness cover can vary widely based on the insurance provider, the level of cover you need, and your personal circumstances.

To give you an idea about the premiums, here are some average costs for combined life insurance with critical illness cover included, lasting 30 years for a non-smoker, and paying out £100k:

Best UK critical illness cover providers

The best insurance provider to use for critical illness cover will depend on your situation and the level of protection you need, but here are some examples of popular UK providers:

• NatWest: Life insurance and critical illness cover from NatWest is actually provided by Aviva. With NatWest, you can opt for the ‘Critical 3 with Life Insurance’ product, which is essentially critical illness cover and is available for customers between 17 and 75 years of age.

• Vitality: With Vitality’s critical illness cover, which it calls ‘serious illness cover’, you can claim more than once and you’re able to extend your plan to include later-life conditions like dementia. Vitality covers up to 174 conditions, which it claims is more than any other insurer.

• Legal & General: When you take out critical illness cover with Legal & General, you’ll automatically get children’s critical illness cover included. The survival period for policies is 14 days, however, some types of cancer are not included, and you need to have permanent symptoms to make a claim for some illnesses.

If you want to get a better idea of the best UK critical illness providers based on your needs and circumstances, it’s worth having a brief discussion with an insurance adviser to see what your options are.

Why choose Teito for your critical illness cover?

Finding the best critical illness cover isn’t always straightforward. Your individual circumstances and lifestyle will be unique, but expert support ensures you get protection that works for you, at a reasonable cost.

Our experienced advisers can find the most suitable and affordable critical illness cover for your needs, whether that’s a standalone policy or combined with life insurance. They can do this because they know which insurers can offer the best critical illness cover options for any type of applicant.

Here are some more of the reasons people choose us for their critical illness cover:

• We can get tailored quotes for critical illness cover

• Our advisers have 5-star ratings on leading review sites

• Your first chat is free, with no obligation to proceed

• Access to specialist insurers with exclusive deals

Ready to take advantage of a free, no-obligation chat with an adviser specialising in critical illness cover? Get started here.