Income protection vs critical illness cover

There is a big difference between income protection and critical illness cover, which is important to understand if you are considering taking out either type of policy.

Income protection pays out a regular monthly income if you are unable to work due to illness or injury, whereas critical illness cover pays out a lump sum if you are diagnosed with a specified serious illness.

Looking for critical illness cover or income protection right now? Check out our overview of the UK's top critical illness providers, or our list of the best income protection companies.

Altetnatively, read on to learn about:

• Income protection vs critical illness cover: Which is right for you?
• Critical illness cover: What you need to know

Income protection vs critical illness cover: Which is right for you?

Which is right for you? When deciding whether income protection or critical illness cover is right for you, it is important to understand the pros and cons of each type of insurance. In short, income protection will provide you with a replacement income if you are unable to work due to illness or injury, while critical illness cover will pay out a lump sum if you are diagnosed with a specified serious illness.

Income protection can be a more flexible and affordable option, as you can choose the level of cover you need and the policy can be tailored to suit your individual circumstances.

However, it is important to remember that income protection does not cover you for every eventuality and you may still need to make alternative arrangements to cover major immediate costs if you are unable to work. For example, if you needed building work to adapt your home to changed circumstances, or to pay for private medical treatment, a Critical Illness policy would be more useful.

That is reflected in the difference between how much is covered by the two types of policies. The maximum benefit with Income Protection plans is typically £250,000 per year, while with Critical Illness Cover it can be as much as £3 million, or even an unlimited amount.

Learn which insurance companies offer the highest annual benefit limit on Income Protection policies, and which have the highest Critical Illness Cover maximum benefits.  

Critical illness cover: What you need to know

Critical illness cover can provide peace of mind as it pays out a lump sum if you are diagnosed with a serious illness, which can be used to cover any costs you incur as a result of your illness. However, it is important to be aware that critical illness cover is not always available and it can be more expensive than income protection.

When choosing between income protection and critical illness cover, it is important to consider your individual needs and circumstances to make sure you choose the right option for you.