Critical Illness Basics
This article was last updated:
🤷♀️ If you don't know where to start with critical illness insurance, we're here to help!
This article was last updated:
🤷♀️ If you don't know where to start with critical illness insurance, we're here to help!
Critical illness cover is designed to provide financial support to people who have been diagnosed with a serious illness. Unlike income protection, it gives you a one-off payment, free from tax, which can be used to fund medical treatment, repayments on a mortgage, or other expenses.
If you're looking for insights into the best critical illness providers in the UK, we have a separate guide.
Read on to learn:
Critical illness cover is a type of insurance that pays out a one-off, tax-free lump sum if you are diagnosed with a serious illness. The money can be used to help pay for medical treatment, make mortgage repayments, or cover other expenses.
There is no definitive list of illnesses that are covered by critical illness insurance, as this will vary from insurer to insurer. However, most policies will cover illnesses such as cancer, heart attack, stroke, cardiomyopathy, Parkinson's, liver failure, and kidney failure.
As an example, at the time of writing Aviva covers 53 critical illness – but some insurance companies cover as many as 182 critical illnesses.
It depends. Aviva's policy document states that it covers "Rheumatoid arthritis – of specified severity". It's important to seek clarification from your insurer if you're looking for specific illnesses to be covered, but the policy wording is unclear.
Yes – cancer is the type of serious illness critical illness insurance policies are designed to help with. However, do check the policy terms of the specific insurers you are considering, as they may exclude less advanced cases, or certain types of cancer.
Anyone could be diagnosed with a critical illness at any time, but there are some groups of people who might be more likely to need this type of insurance. For example, people with a family history of serious illness, or those who have an occupation that carries a higher risk of illness (such as firefighters or health care workers).
The cost of critical illness cover will vary depending on a number of factors, such as your age, health, and the amount of cover you need. However, as a general guide, you can expect to pay around £10-£20 per month for every £100,000 of cover.
The amount of critical illness cover you need will depend on your individual circumstances. You should consider how much money you would need to cover medical expenses, mortgage repayments, or other costs if you were to be diagnosed with a serious illness.
No, payouts from critical illness policies in the UK are tax-free.
You can get critical illness insurance as an add-on to your life insurance policy, or as a standalone policy. Find out how to get life insurance here.
If you already have life insurance, you should check whether your policy includes critical illness cover, as some do.
There are a number of UK life insurance companies that offer critical illness cover, including Aviva, Legal & General, and Zurich. In fact, we have a whole article about companies that provide critical illness insurance.
Critical illness cover and life insurance are both designed to provide financial support in the event of your death. However, critical illness cover also pays out if you are diagnosed with a serious illness, whereas life insurance only pays out on death.
Learn more in our article about life insurance vs critical illness insurance.
Income protection is another type of insurance that can provide financial support if you are unable to work due to illness or injury, but it pays a regular income rather than a one-off lump sum.
We went into the details here: Income protection vs critical illness cover.
The main benefit of critical illness cover is that it can give you peace of mind knowing that you and your family will be financially protected if you are diagnosed with a serious illness. However, it is important to remember that critical illness cover is not a substitute for health insurance, and it will not cover all illnesses.
Life insurance can be a tax deductible business expense in certain cases. For example, if the life insurance policy is taken out on a key employee, the premiums can be deducted as a business expense. Additionally, if the life insurance policy is used as collateral for a business loan, the
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