Helping protect your future and your loved ones, critical illness cover is a type of insurance policy where you receive a single tax free payment if you’re diagnosed with a serious illness.

A critical illness insurance policy will have a list of conditions. If you get diagnosed with an illness mentioned in your policy, you can make a claim and receive a payment.

The pay out from critical illness cover can help support you during a life changing situation which may affect your ability to work, by giving you money. This support can help towards general outgoings or unexpected medical costs.

The amount you get through critical illness insurance can be used to cover any expenses which arise from your illness, but you are free to use the money however you decide.

But remember, once the money is paid the policy will end and you will no longer have any cover. Try and choose a policy that will take care of all your financial needs during that time.

What's covered by critical illness insurance?

The Association of British Insurers (ABI) states that all critical illness policies cover the following illnesses, providing they are of a certain severity:

  • Cancer

  • Heart attacks

  • Strokes

Critical illness cover pays out if you have been diagnosed with a life changing illness that is unlikely to result in your death, such as Alzheimer’s disease or if you have a major organ transplant.

Most critical illness policies will also cover permanent disability caused by illness or injury.

It is important to note that the insurer’s definition of critical illness is different from terminal illness, which is often covered under life insurance.

Terminal illness cover pays out when you have been diagnosed with an illness where you are given 12 months or less to live.

How is critical illness cover different from life insurance?

A pay out from critical illness cover will be in the form of a lump sum if you are diagnosed with an illness listed in that policy. It will not pay out for previous conditions or if you pass away suddenly.

A pay out from life insurance will be in the form of a lump sum when you die. This will go to anyone you choose when you take out the policy.

Life insurance is built around protecting your loved ones with some kind of income when you are no longer around. This can be reassuring thing if you are the main earner in your family.

If you want insurance to cover sudden death, look for a life insurance policy instead.

Some life insurance policies will offer critical illness cover as an extra so it may be wise to check this when comparing the different cover available.

How much critical illness insurance do I need?

Each insurer offers a limit on how much you can claim, ranging from £25,000 upwards.

To help you find a policy with the best critical illness cover, think about:

  • Conditions: Most policies offer cover for types of strokes, cancer and heart attacks, with some also covering up to 114 different health conditions.

  • Length of time: Each insurer sets a maximum term you can have a policy for, or up to a particular age - whichever comes sooner.

  • Your age: How old you are can make is easier or more difficult to get critical illness cover. Some insurers will not cover you when you reach a certain age, such as 59 or above.

The level of cover you choose will affect your monthly premiums, which you pay throughout the term of a critical illness policy.

Critical illness insurance usually covers one person but you can also get joint policies, which cover yourself and a partner; and family policies, which would cover yourself, your partner and your children.

If you want critical illness insurance for a certain condition, look for a policy that covers it before you apply.

If you want cover that is unlimited or ends when you reach a certain age, you could get “whole of life” critical illness cover instead.

How to apply for critical health insurance

To apply for critical health insurance:

  • Decide on your cover: Use the information above to decide what you need from the best critical illness cover

  • Compare quotes by using our specialist partner ActiveQuote: Complete the online form or contact them over the phone

  • Apply for critical illness cover: You can usually do this online or over the phone but some insurers may offer a face-to-face service

How to find the best critical illness insurance

A good critical illness cover comparison will help you find cover that will provide for you when you need it most. Based on the information you give, the insurer will send you a quote with:

  • The cover you have chosen

  • How much you will pay each month

  • How long you will pay it for

  • Any terms and conditions

If you need further guidance on the type of policy to apply for, speak to an independent financial adviser