Written by: Andy Walton - Proposition Director - Protection

It’s a well known fact of life that we never truly know what’s around the corner. Unexpected health issues can strike any of us at any time, and being diagnosed with a critical illness can be devastating both emotionally and financially for you and your loved ones. 

While nothing can take away the emotional and physical turmoil you will face during this extremely stressful period, critical illness cover can help to ease some of the burden, protecting you and your family against any financial hurdles you may face if you were to be diagnosed with a critical illness.


What is a critical illness?

A critical illness is classed as a serious medical condition that can have a debilitating impact on a person's quality of life. These illnesses are often life-threatening and can include cancer, heart attack, stroke, and organ failure. They can also include severe injuries, such as paralysis or loss of limbs. If you become permanently disabled, you may be entitled to additional cover under illnesses that aren’t specifically listed (depending on your policy).

What is critical illness cover?

Critical illness cover is a type of insurance policy that provides a one-off, lump sum payment to an individual who is diagnosed with a critical illness. The policy is designed to help individuals cover the costs associated with their illness, such as a loss of income. It’s often used to cover expenses not covered by other insurance policies, such as household bills, childcare, and adjustments to your property such as wheelchair access.

Who is eligible for critical illness cover?

Cover is typically available to those between the ages of 18 and 64, but the cost and range of illnesses covered by each policy will vary based on age, gender, health, and other factors. Individuals who have a pre-existing medical condition may have difficulty obtaining critical illness cover or may need to pay a higher premium.

Terminal illnesses are not usually covered as part of a critical illness policy. This is usually defined as anyone who has a life expectancy of less than 12 months from diagnosis.

Remember, each policy is different, so be sure to check the terms and conditions when taking out critical illness cover to ensure that they meet your circumstances.


When should I take out critical illness cover?

It’s worth thinking about taking out critical illness cover when you apply for your mortgage or have recently remortgaged, as this is a long-term financial commitment that you’ll want to be covered for in the event of being diagnosed with a critical illness. If you have dependents who rely on your income, then it's even more important to ensure you're fully protected.

Generally speaking, if you think you can't afford all the expenses that may arise if you were to get diagnosed with a critical illness, then there is a high likelihood that it’s the right policy for you.

What is the difference between critical illness cover and life insurance?

The main difference between critical illness cover and life insurance is how and when the lump sum payment is provided to you. Critical illness cover most commonly pays out a lump sum following diagnosis of a health condition defined within the terms of the policy. Life insurance pays out if you were to die during the term of the policy. However, like life insurance, you can only cash in your lump sum payment once, and the critical illness policy ends once the benefit has been paid to you.

Why should I take out critical illness cover?

Critical illness cover provides a much-needed financial cushion if you are diagnosed with a critical illness. It can be a vital lifeline if you’re the main breadwinner in your family or have dependents that rely on your income, or if you have a mortgage.

There are a wide range of benefits to taking out critical illness cover. Most importantly, it provides financial support at a time when you may be unable to work, or if you have additional medical expenses. It also offers peace of mind knowing that you have a safety net in place if you are diagnosed with a critical illness, helping to alleviate the financial burden associated with a loss of income.

If you’re interested in taking out critical illness cover or want to discuss your protection needs, speak to one of our advisers today.

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Our advisers are committed to finding the right protection policies for your needs in order to protect what matters to you most and give you peace of mind, should the worst happen. 

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Frequently asked questions

What is Financial Risk?

Financial risk is how likely you are to experience financial setbacks due to unforeseen factors, such as death, critical illness, disability, and job loss.  

What causes financial risk?

Financial risk can be caused by a variety of circumstances. Some of these factors are in your control, like your level of spending and lack of insurance, whereas others are external, such as the economic climate and health issues.

How does protection work?

By taking out protection policies, you can minimise the impact of these financial risks. This can be income protection or other forms of insurance, and also by having a healthy emergency fund, in case you face any financial risks that aren’t covered by your insurance.

What is income protection?

Income protection offers financial support if you’re unable to work due to illness or injury. It replaces part of your income and will continue to pay out regular, tax-free instalments until you’re able to return to work.

How do I know if I’m financially stable?

Financial stability means you have enough income to cover your expenses and have a buffer for emergencies (protection policies and savings). Our Financial Risk Assessment can help you assess your current situation and inform you if any improvements could be made.

How can I reduce my financial risk?

Unpredictable events can hurt your finances. Take a free Financial Risk Assessment to identify your vulnerabilities and explore protection options that plug the gaps, giving you peace of mind.

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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