None of us know what life has in store for us. And having to consider the unthinkable things we have to deal with, such as becoming critically ill or losing a loved one to a critical illness, is difficult. Critical illness cover can help give you some peace of mind. By taking out the right type of cover, you can help make things a little more bearable for yourself and those around you should critical illness affect you.

What is critical illness cover?

Critical illness protection is a policy which is designed to pay out a lump sum of funds if you are diagnosed with or undergoing treatment for a critical illness.

If during your policy term you are diagnosed with a critical illness which is covered under your policy, depending on the type of policy taken, you will usually receive a one-off tax-free lump sum payment. The payment is designed to help with the drastic changes you are currently undergoing in your life, such as covering loss of earnings, payment towards your mortgage and to help with any additional adjustments you may need to make as a result of your diagnosis.

Critical illness protection is not to be confused with life or income protection. It is an additional form of cover which can be added onto life insurance policies that you may already have, or it can be added as a stand-alone policy.

Different types of critical illness cover

There are two types of critical illness cover which are available to you - these are additional and combined policies.

  • Additional cover: If life insurance is taken out with separate critical illness cover, then additional cover will offer a pay-out if you get a critical illness and if you die; both during the policy term.
  • Combined cover: When purchased at the same time as life insurance, combined cover pays out only one lump sum payment, in the event that you become critically ill or die during the policy term.

What illnesses are covered?

The illnesses covered differ depending on the provider you opt for. It is important to read all the inclusions and exclusions of the policy you may take out to ensure you could be covered in the future. There are typically 35-40 illnesses covered, but the most common claims made on policies are relating to:

  • Cancer
  • Heart attack
  • Stroke

Be sure you have a clear understanding of the critical illnesses which are both included and not included before taking out your policy.

Do I need critical illness cover?

Most people will feel if they have life insurance then this is satisfactory enough for protecting both themselves and their family in the event that anything should happen to them. However, suffering from an unexpected critical illness can take a toll on you and your family, not only financially - but it will also add additional stress and pressures while having to deal with illness too. Having critical illness cover, alleviates this burden.

There is no right age to take out critical illness cover, yet when you reach certain milestones in your life it may be considered as a good time to begin exploring the options available to you. You may begin to consider critical illness cover if:

  • You are the main breadwinner for yourself and your family
  • You have dependants
  • You are not eligible for benefits, or if you are and they are unable to cover your outgoings
  • You are a single income household

According to findings, in 2019 the number of claims which were paid out via the protection industry sat at 98.3% (Cover, 2019). This is currently the highest percentage on record for pay-outs, offering families the cover and peace of mind they signed up for.

Important factors to consider

Critical illness cover often comes with exclusions and specific requirements before making a claim. As a result of this, it is extremely important to read through the policy thoroughly before you decide to take it out. Some policies will not cover you if the critical illness is brought on by any pre-existing medical conditions. Therefore, you will be required to go through your current health conditions prior to taking out your policy.

Costs will vary dependent on the level of cover you opt for, but also based on your information supplied. You will be required to disclose any pre-existing medical conditions, as well as family history. Your answers will determine if the policy provider sees you as potentially ‘high risk’ for becoming critically ill.

As with all protection policies, it is crucial you disclose all the information required accurately. In the event of needing to make a claim, any incorrect or intentionally undisclosed information could result in a rejection of your claim.

How Choice Mortgages can help

At Choice Mortgages we understand that the most important things in life are worth protecting. Making sure that everything is covered with the right policy for yourself and your family provides peace of mind.

It is important to understand all of your options, so that you can make the right decision according to your circumstances and budget. We want to ensure you are financially resilient in any event, while also considering any existing provisions you have privately or via your employer.

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Istvan Jozsa

Thank you to Nicola and Choice Mortgages. We moved into our first home. It couldn’t happen without Choice Mortgages!

The River Welland running under a bridge in Stamford, Lincolnshire, England

Based in Stamford, Lincolnshire

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Choice Mortgages is an independent mortgage broker; having access to thousands of mortgage and protection products on the market. Our office has been located in Stamford for over 20 years and we have a team of professional advisers with a vast amount of experience.

Locally we are a short distance from Peterborough, Oakham, Oundle and Spalding.

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