What You Need to Know About Critical Illness Insurance

Insurance experts Engaged Solutions share their knowledge on critical illness cover to help you stay informed about how you can protect yourself and your loved ones if the worst happens. 

Let’s face it, no one likes to think about what they’d do if they became seriously ill. It’s not an easy topic and if you think about too much it can all leave you feeling a bit down in the dumps. However, the unfortunate reality is that we can’t really control what happens in the future, we can only prepare for it.

That’s what critical illness insurance essentially allows you to do.  Also known as critical illness cover, it’s an insurance policy that is designed to provide a tax free lump sum payment in the event that you suffer a life changing illness. You can buy it as a standalone policy or as an attachment to your life insurance policy but either way it is designed to ensure you have a safety net should you fall ill.

What’s covered under critical illness insurance?

This can change from provider to provider so it is always worth doing some research to find the best coverage for you. Like most personal insurances, pre-existing medical conditions may not be covered.

The main conditions covered are:

  • Stroke
  • Some forms of cancer at set stages
  • Heart attack
  • Multiple Sclerosis

Most policies will also offer cover if an illness leads to a permanent disability. This could include:

  • Traumatic head injury
  • Deafness
  • Parkinson’s disease
  • Bacterial meningitis
  • Major organ transplant

In these instances, depending on the provider, the lump sum will be paid out.

How much cover do you need?

Like most insurance policies, it all depends on your personal needs and commitments. You would need to take into account any outstanding finance, your mortgage, personal loan payments and credit card debt. Then add to that an amount you would need to live comfortably, if it is unlikely that you would return to work, and you’ll have an idea of the level of coverage you need.

How long can you take out the cover for?

A critical illness insurance policy is usually for an agreed set term. If it runs alongside your Life Insurance policy, it could be set to match the term of your mortgage. As a standalone policy it can be a longer or shorter amount of time. If you do not claim on the policy by the time it reaches its expiry date you do not receive any refund of premiums.

How to claim

To claim on your critical illness insurance you must survive the critical event by between 14 and 30 days. This is not a Life Insurance policy, so it doesn’t pay out on your death.

When you have lodged the claim, it will be assessed as quickly as possible. The policy provider will access your medical records and speak with your doctors to learn about your situation before making a decision. If approved, you’ll receive a tax free lump sum and the policy will come to an end.

It’s important to note that you can only claim once on this sort of insurance.

If you have not suffered a critical event, like a stroke, but have been diagnosed with a life changing illness, the process for claiming is the same.

How much does Critical Illness Insurance cost?

It differs by provider and individual. Premiums are calculated on:

  • Age
  • Height, weight
  • Smoker status
  • Medical history
  • Your profession – some professions lead to a higher risk of a critical event happening.

Like all personal medical insurances, you should review your critical illness insurance regularly. This is to make sure that the correct amount of cover is in place and you have updated your provider on any changes to your health, as this could have an effect on what is covered and the premium you pay.

This is why it is important that you review multiple providers or deal with Insurance Brokers that are regulated by the FCA and have access to multiple products, not just one.


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