Critical Illness Cover

Critical Illness Cover is designed to pay out a lump sum upon being diagnosed with a covered illness, condition, or disability. This can minimise the financial impact on yourself and your family if you become critically ill.

Getting seriously ill or sustaining a life-changing injury isn’t something anyone likes to think about. However, it’s something you need to consider if you want to protect against the financial impact that can arise from a critical illness.

Critical illness cover provides you with a lump sum payment should you fall critically ill. For example, if you were to have a heart attack you may need to retire early, or if you were to require treatment for cancer you may need to take an extended amount of time off work. Critical Illness Cover ensures you can maintain your standard of living during an already difficult time.

What is Critical Illness Cover?

Critical Illness Cover is a type of insurance that pays out a lump sum if you are diagnosed with certain illnesses, conditions, or disabilities. This payment could be used to replace lost income, pay for private treatment, take care of household bills, or simply to give you some valuable financial breathing space until you get back on your feet.

How does Critical Illness Cover work?

Critical Illness Cover is usually taken out in connection with a life insurance policy. This is known as combined cover, which means you only pay one monthly premium. This can be cheaper than having a policy for each type of cover, but it does mean that the policy will only pay out once. For example, if you make a claim upon diagnosis of a critical illness your policy will pay out and expire, leaving you without life cover.

Some insurers provide Critical Illness Cover on its own, without a life insurance policy. If you decide to take out standalone Critical Illness Cover, you pay for the policy separately to any other life insurance policies you may have. This may be more expensive than a combined single monthly premium but would mean you’re covered for each scenario separately.

How much does Critical Illness Cover cost?

The cost of Critical Illness Cover depends on a range of factors, such as your age, health, lifestyle, and any pre-existing conditions you have, as well as how much cover you require and how long you want the policy in place.

When you apply for cover, you will need to provide details of your medical history to the insurer for them to be able to work out your premium. If you’re in good health, it shouldn’t take long for insurers to provide quotes. If the insurer needs extra details it may take a little longer.

The best way to find out how much it could cost is to get a Critical Illness Cover quote.

What do I need to get a quote?

To obtain a quote for Critical Illness Cover you will need to provide the following information:

  • Your name and date of birth
  • How much cover you require
  • The type of cover you want
  • The amount of time you want to be covered for
  • If you smoke cigarettes or other nicotine substitutes
  • Your medical history.

When providing this information, you must be honest. For example, if your insurer finds out later that you haven’t disclosed a pre-existing condition upon application, your entire policy will be void. We help make sure your quote is accurate, and that you disclose everything from the get-go to avoid this scenario.

Getting a health check

Compare Critical Illness Cover quotes

When considering any type of insurance, it’s important to compare quotes before taking out a policy. By comparing quotes, you ensure you get the most suitable cover at an affordable price.

It’s important to note that the cheapest quote isn’t always the most suitable for you. Each policy will have different exclusions and conditions so you should choose your cover carefully. Not all Critical Illness Cover policies are the same. The definition of a critical illness varies between insurance providers which is why it’s important to know exactly what you are and aren’t covered for.

The easiest way to compare quotes is through an insurance broker, like us. Not only is it easy, but it’s also completely free! Our team of insurance consultants are able to talk you through your options, explain insurance-related jargon, and help you with the application process.

You can compare Critical Illness Cover quotes here

What affects the cost of Critical Illness Cover?

Several factors affect the cost of Critical Illness Cover. These factors vary from person to person which is why it’s important to honestly provide your information when searching for quotes.

These include personal details such as:

  • Your age; as you age, your risk of getting ill increases. Because of this, the older you are when taking out a policy, the more it is likely to cost.
  • Your health; someone in good health will be cheaper to insure than someone who isn’t. If you have health issues or pre-existing medical conditions you must disclose these when taking out your policy. If your insurance provider finds out later that you haven’t been honest it could void your policy.
  • Your job; some jobs pose a higher risk than others. The riskier your job, the higher your premiums may be.
  • Your hobbies; taking part in dangerous hobbies, such as sky diving for example, will increase your premiums. You must disclose this information when taking out your policy.
  • Your lifestyle; your insurance provider will want to know if you smoke as this affects your risk of getting ill. As with the other points above, you must disclose this information to your insurance provider, otherwise your policy may be void.

As well as policy details such as:

  • The policy term; how long you want the policy to last.
  • The type of policy; whether you combine critical illness cover with life insurance.
  • The sum assured; the amount you’re covered for.

What happens if I don’t pay my premiums?

As with most insurance policies, if you miss a payment your cover will end. Each insurance provider treats this scenario differently, so it’s best to check your policy documents. It’s wise to set up a direct debit to cover your monthly payments to avoid this situation.

What’s the difference between Critical Illness Cover and Life Insurance?

Although both forms of cover are designed to ease the financial burden at a difficult time, they actually pay out in very different situations.

Life Insurance is designed to financially help your loved ones if you pass away. The lump sum is paid to your beneficiaries, usually your partner and/or children, to ease the financial pressures you may be leaving behind. The payout is usually used to pay off mortgages, loans, and any other outstanding bills.

Critical Illness Cover is different to Life Insurance because it pays out upon diagnosis of a condition, illness, or disability. The lump sum is paid out to you and is designed to help pay for private medical treatment if necessary, or simply cover household bills so you can maintain your standard of living.

Life and Critical Illness Cover

When Critical Illness Cover is added to a Life Insurance policy, this is known as Combined Cover. They are set up together which means you only pay one premium. This is usually cheaper than taking out two separate policies, however, it’s important to note that the policy will only pay out once. For example, if you made a claim upon diagnosis of a critical illness your policy would expire, and you would be left without life insurance.

Who needs Critical Illness Cover?

No matter your age or circumstances, you may experience a critical illness in your lifetime. Having a backup plan, such as Critical Illness Cover, can help ease the financial stress of being unable to work, should you need it. Other forms of backup may include dipping into your savings or relying on an employment benefits package.

Researching your family history for any signs of genetic predispositions, such as cancer, strokes, and heart attacks, may help you decide if Critical Illness Cover is right for you. Consider whether multiple family members have suffered an illness, and how they have managed financially as a result.

Family expenses and care
Woman walking with phone

Can you get Critical Illness Cover on its own?

Yes, you can get Critical Illness Cover on its own. This is known as standalone cover. Whether this type of cover is right for you is a personal decision. You may want to talk to an insurance expert before making this decision.

If you’re interested in speaking to one of our consultants, please leave us your details and we will give you a call to discuss your options.

How much Critical Illness Cover do I need?

To work out how much cover you require, consider the costs you would need the pay out to go towards if you’re unable to work. These costs may include your mortgage or rent, any outstanding loans or credit cards, potential childcare costs, regular household bills (utilities), general living costs (food and petrol), and any medical expenses such as private medical care or adapting your home.

Once you’ve worked out what costs would need covering and added the total together, you will have a better idea of how much cover you’re likely to need. At this point it’s worth considering if you have any savings you could use in an emergency, or if you have an employee benefits package that covers you for long-term sickness. But remember, not every employer will offer this sort of package, so if you change jobs you may need to revisit this process.

What does Critical Illness Cover?

What your critical illness policy covers can differ significantly between insurers. Exactly what’s covered depends on the specific details of the policy that you take out. The severity of your condition can also affect whether you are covered, but a general list of conditions, illnesses, and disabilities you may be covered for include:

  • Non-terminal Cancer
  • Heart attacks
  • Multiple sclerosis
  • Strokes
  • Major organ transplants
  • A physical, permanent disability
  • Total blindness
  • Total deafness
  • Parkinson’s disease
  • Alzheimer’s disease
  • Severe head injuries

Some insurers provide the option to add specific additional illnesses to your cover. Some insurers will also cover your children when you take out a policy. There’s lots of factors to consider when choosing an insurer and your policy. Talking to an insurance broker can help answer your questions and give you a wider perspective on the types of policies available. If you’d like a chat to discuss your options, we’re here to help.

What is not covered by Critical Illness Cover?

Before taking out Critical Illness Cover it’s important to note that insurers class critical illnesses and terminal illnesses differently. A terminal illness is defined as a life-expectancy of less than 12 months and are excluded from Critical Illness Cover.

That said, a critical illness policy may only pay out once your illness reaches a certain level of severity. It’s necessary for you to read any policy documents carefully and thoroughly so that you understand what is and isn’t covered. If you take out Critical Illness Cover through Freedom to Insure, our team will talk you through the policy details and try to make you aware of the ins and outs of your cover. It’s still wise to read all your documents so you know exactly what you’re eligible for, in the event you should need to claim.

When does Critical Illness Cover pay out?

It’s vital to contact your insurer as soon as you receive diagnosis of an illness so they can talk you through their claims process and give you an indication of how long it usually takes for policyholders to receive the pay-out.

Upon making a successful claim on your critical illness policy, the money is paid out in one single lump sum. How long this takes varies between insurers, so it’s best to contact your insurance provider as soon as possible. In some circumstances, the claims process can take up to eight weeks.

Will my Critical Illness payout be taxed?

You won’t have to pay tax on payments received from a critical illness policy, because they’re not classed as income.

However, if you take out joint life and critical illness cover and make a claim but do not receive the pay-out before passing away, your beneficiaries could face a potential inheritance tax bill, as the money forms part of your estate. If your estate is valued at over £325,000, your loved ones will be charged inheritance tax on the insurance pay-out.

To get around this, you can write your insurance policy in trust. This means your policy is classed as being outside of your estate and is therefore not subject to inheritance tax. We’ve partnered with Libertas Wills to provide Wills and Trusts for our insurance customers, to provide peace of mind.

Critical Illness Cover vs Income Protection Insurance

Critical Illness Cover pays out a single lump sum if you are diagnosed with a potentially life-threatening illness. What you do with the money is entirely up to you.

Income Protection Insurance provides regular payments if you are unable to work due to an illness or injury. This is designed to bridge the financial gap till you are able to return to work. These payments are typically used to cover household bills such as rent or mortgages.

Income Protection Insurance has a broader scope when it comes to defining illnesses and injuries. A bad back, for example, wouldn’t be covered by Critical Illness Cover as it may not be life-threatening, but this could be covered by an income protection policy if you aren’t able to work. Income Protection helps you to worry less about your finances whilst you recover and get any treatment you may need.

What’s the difference between Critical and Terminal Illness Cover?

It’s important to understand the difference between critical and terminal illness cover before you arrange insurance as these two types of cover are very different. Critical and terminal illnesses are both referred to as serious medical conditions.

The difference between the two is that a terminal illness is when your condition includes a life expectancy of less than 12 months, whereas a critical illness is a serious injury, illness, disability, or condition that is unlikely to result in near death.

Some life insurance policies include terminal illness cover as standard. If you already have life insurance in place it’s probably best to check your documents before you arrange further cover. If you don’t have cover and this is something you’d like to arrange, our team of friendly insurance consultants are ready to answer your questions and talk through your options.

Joint Critical Illness Cover

It is possible to take out joint Critical Illness Cover, insuring two people under the same policy. If you decide to opt for a joint policy, you should be aware that your insurer will only pay out once. For example, if one of you claims and the full sum assured is paid out the policy will end. This leaves the second person on the policy without cover.

Because of this, you may want to consider two separate policies instead. You should compare quotes for joint and separate policies to weigh up if being covered separately may be more cost-effective.

It’s easiest to compare quotes by speaking to an insurance broker, like us. We provide relevant quotes from several insurance providers at once, saving you time and money. When it comes to taking out a policy, the final decision is always yours.

How to buy Critical Illness Cover

Step 1

Work out how much cover you’re likely to need (scroll up to read ‘how much critical illness cover do I need?’ for help).

Step 2

Acquire quotes from across the insurance market to compare policies and premiums. At this point make sure you are honest when providing your information.

Step 3

Decide which insurance provider offers the right protection for you.

Step 4

Apply for cover!

If you’d like one of our experts to guide you through this process, leave us your details and we can give you a call to discuss.

Is Critical Illness Cover worth it?

As with any type of insurance, being covered is worth it if you find yourself needing to claim. Ask yourself, if you were to become critically ill leaving you unable to work, how would your family cope financially without your income? It may be worth having cover in place to provide peace of mind just in case.

Critical Illness Cover for your mortgage

One of the biggest benefits of Critical Illness Cover is that it can help repay your mortgage if you were to fall critically ill. The sum assured is usually calculated with your mortgage in mind, meaning that if you need to claim the payout should help to clear the outstanding amount.

This means your family will be able to continue to live in your family home if you are unable to provide an income. Without Critical Illness Cover you could struggle to meet your mortgage payments, causing financial stress for yourself and your loved ones.

Can I get Critical Illness Cover if I’ve already had an illness?

As with any insurance policy, you must tell the truth in your application. If your insurer finds out later that you weren’t honest it could void your policy, meaning you aren’t covered.

If you have a pre-existing condition you should still be able to find an insurer to cover you, however, it’s likely that your cover may be more expensive and may include more exclusions than those who do not have a history of medical issues.

A pre-existing condition would be an illness, disease, or injury that you have previously received medical treatment for, or a condition like multiple sclerosis or Parkinson’s. Insurers may also look at your family’s medical history to determine if they can provide cover for you.

How to make a Critical Illness claim

Upon diagnosis of a critical illness, you need to let your insurance provider know as soon as possible. Each insurer has its own claims process, but you can usually make a claim online or by phone. Reviewing your claim may involve your GP or consultant if your insurer needs further medical evidence to support the diagnosis and therefore your claim.

If your claim is successful you will receive the payout as a single lump sum. You can use this payout for whatever you like but most people use it to cover monthly bills, adapt their home, or pay for private medical treatment.

How many critical illnesses can I claim for?

Critical Illness Cover will only pay out once. Your policy will clearly outline how serious a critical condition must be before you can claim. Illnesses that are covered can vary between insurance providers so it’s vital you read all your policy documents thoroughly.

If I don’t claim do I get money back?

Much like car insurance, if you don’t claim on your critical illness policy you don’t get money back. The cover is designed to pay out if and when you need it and is not a form of savings.

Get a Critical Illness Cover quote

To talk to one of our consultants for a free accurate quote please leave us your details so we can give you a call.

Freedom to Insure has over 10 years of experience and access to the whole of the UK life and Critical Illness Cover market, unlike other brokers. Rather than using a handful of insurers, or being directly affiliated to one, we will look at critical illness policies from across the country. Fill in the quick and easy form below and one of our experts will contact you. Alternatively, give us a call on 0203 092 1372, or visit our contact page.

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