Critical Illness Insurance

Each year nearly a million people in the UK find themselves unable to work due to a serious illness or injury, many as a result of so-called "critical illnesses" such as heart attack, stroke or cancer. Treatments and survival rates for these illness are improving all the time, but if you couldn’t work due to a serious illness, how would you manage? Could you survive on savings, or on sick pay from work? Would you want to pay off your mortgage or have funds to pay for adjustments in your home or lifestyle? You might want to consider critical illness insurance. Read on for more information or visit the FAQ section below.

What is It?


It is designed to pay a lump sum if you are diagnosed with a critical illness or disability. It covers specific critical illnesses set out in your policy (usually long term/serious conditions).


How Does It Work?


You choose the sum paid out – the larger the amount, the higher the cost of the premium. Cover lasts for the period you choose, e.g. until your mortgage is paid, or until you retire. Payments stop when you are able to return to work, retire or the policy ends.

Why Might I Need It?

 

To pay off the mortgage, pay bills or adapt your house, if you are diagnosed with one of the serious illnesses set out in the policy. Unlike life insurance, which is intended to provide for someone else if you die, critical illness cover will benefit you as the claimant, as well as those dependent on you, should you need to claim. See the box below for a list of illnesses generally covered by a Critical Illness policy.

How much does critical illness insurance cost?


Insurance companies will provide an initial quotation based on standard terms which would apply to someone with a clear health history. When you apply they will assess several factors to determine whether standard terms should apply or whether there should be a variation from the standard. These factors could include your age, health status, occupation, if you smoke and the type of cover you want.


It may be difficult to get cover if you are already suffering or have suffered from a serious illness. Insurers may also raise the cost of policies for people they think are more likely to suffer from a serious illness due to certain risk factors, like smoking status or family medical history. However, our extensive knowledge of the criteria of the various providers allows us to match you with the insurance company most likely to offer the cover you need.


Things to consider before buying critical illness insurance


  • What conditions do I want the policy to cover?
  • What isn't covered by this policy?
  • How long do I want to be covered for?
  • Can the policy cater for changes in my life?
  • How much is it going to cost?


Contact us for advice and no obligation quotations.


Still have questions? See our FAQ section below.


What is covered?


According the the Association of British Insurers (ABI) all critical illness policies cover three core conditions:


  • Cancer
  • Heart Attack
  • Stroke


In addition to the core conditions, insurance companies may also cover other conditions, such as:


  • Dementia including Alzheimer's disease
  • Aorta graft surgery
  • Benign brain tumour
  • Blindness
  • Coma
  • Coronary artery by-pass surgery
  • Deafness
  • Heart valve replacement or repair
  • Kidney failure
  • Critical Illness Cover
  • Loss of hand or foot
  • Loss of speech
  • Major organ transplant
  • Motor neurone disease
  • Multiple sclerosis
  • Paralysis of limbs
  • Parkinson's disease
  • Third degree burns


It should be noted that certain types of these illnesses may not be covered (for example some less serious skin cancers may be excluded) or different definitions may apply, so you should check the policy information. As your advisers we can answer questions you may have about how these definitions may affect you.

CRITICAL ILLNESS COVER FAQ

Here are some common questions asked about Critical Illness Insurance. Got a question that is not covered? Send it to us and we will answer it for you and maybe add it to the list below.



  • Why use an Independent Financial Adviser for Critical Illness insurance, rather than a comparison site?

    Many of the good reasons mentioned above for using an Independent Financial Adviser to source Life Insurance are even more applicable for Critical Illness cover. Not all policies cover the same illnesses. Some have broader illness definitions or definitions of disability. Others of additional features such as extending cover to your children.


    As with life cover, you should choose an adviser who will provide you with "whole of market" advice, as we are proud to do.

  • What is a critical illness?

    Critical Illness Cover pays out a cash sum when you are diagnosed with one of numerous specified illnesses. These are usually illnesses which are potentially life-changing. All insurance providers cover three basic conditions: cancer, heart attack and stroke. Most policies will cover many other illnesses as well. However, each provider’s definitions and lists of illnesses vary, so it is always important to check what is and isn’t covered before you take out a plan. As financial advisers we consider the range of illnesses covered as part of our advice process. 

  • What Critical Illnesses are likely to be covered?

    In addition to the three key conditions of heart attack, stroke and cancer there may be many other illnesses covered, including permanent total disability from almost any cause. Other conditions likely to be covered include: 


    Dementia including Alzheimer's disease

    Aorta graft surgery

    Benign brain tumour

    Blindness

    Coma

    Coronary artery by-pass surgery

    Deafness

    Heart valve replacement or repair

    Kidney failure

    Loss of hand or foot

    Loss of speech

    Major organ transplant

    Motor neurone disease

    Multiple sclerosis

    Paralysis of limbs

    Parkinson's disease

    Third degree burns

    Traumatic brain injury

    Total Permanent Disability


    The Association of British Insurers (ABI) have produced a Consumer Guide to Critical Illness which gives information likely to be common to all policies. They have also produced a Guide to Minimum Standards which gives details of the minimum cover requirements for insurers who belong to the ABI. We can help you find the breadth of cover you need with an insurance company which meets or exceeds these ABI standards.

  • What is the difference between Critical Illness cover and Terminal Illness cover?

    A terminal illness is generally classed as one which doctors believe  is expected to lead to death within 12 months. Many Life Insurance policies include Terminal Illness cover as standard.


    On the other hand, a Critical Illness is one of a number of specified conditions which are likely to be life-changing  but not necessarily terminal. Heart attack, stroke and cancer are examples of illnesses which may be paid out with a Critical Illness policy even though the person may go on to make a good recovery.

  • Is Critical Illness Cover worth it?

    The risk of being diagnosed with a Critical Illness unfortunately cannot be overestimated. According to Cancer Research UK, around one in two people will develop cancer in their lives. Furthermore, clients are six times more likely to make a claim under Critical Illness insurance than under life insurance.*


    According to the Association of British Insurers, during 2021 UK insurers paid 18,016 critical illness claims amounting to more than £1.2 billion and with an average claim size of  £67,951. 


    Whether Critical Illness Cover would be beneficial to you depends on a number of factors – your age, your medical history, how much cover you would need, and more. For a full analysis on what kind of cover would be best for you and your family, please make contact. 


    Money in Person would be happy to discuss your protection needs with you. Just give us a call to arrange a free consultation.


    *(Source: Legal & General 2018 claims figures)

  • Will the insurer pay my Critical Illness claim?

    According to the Association of British Insurers (ABI) 91.3% of Critical Illness claims were paid out in 2021. The main reason for claims being declined was ‘non-disclosure’. This is when a customer doesn’t tell their insurer something at the outset that might have affected the insurer’s decision to provide cover and the price of that cover. As long as the customer is open about their medical history at the point of applying for cover, there is no reason why they should not make a successful claim should the need arise.

  • Do you need Critical Illness Cover for your mortgage?

    There is no obligation to purchase Critical Illness insurance when you take out a mortgage. However, many people would struggle to continue paying off their mortgage if they were diagnosed with a serious illness. There are significant benefits to having enough Critical Illness Cover to pay off that mortgage in such an event.


    If you would like to find out whether mortgage protection would be beneficial and cost-effective for you, then why not consult with us.

  • Aren't Critical Illnesses diseases of older age?

    Royal London, a major UK insurer reports that in 2020:

    • Over 24% of critical illness claims were made by people under 45.
    • The average age of people who claimed for multiple sclerosis was 45.
    • The average age of people who claimed for cancer was 50.

    Remember, these are average ages. So some will be older at the time of a claim but many will be younger. Although the chances of suffering a critical illness increase with age, they still exist in younger age-goups.


    Interestingly, taking out a long-term Critical Illness plan a younger age will usually secure a lower premium and more favourable terms than doing so when older (and with more accumulated health issues.)

  • How likely is it that I will need to claim on my Critical Illness Policy?

    It is only possible to answer this in general terms because each person's health and circumstances are different and it depends on the terms of the policy you take out. 


    According to leading insurer LV=, a 35 year old male has a 16% chance of suffering a serious illness before retiring at age 67. For a 35 year old female the risk is 13%. Comparatively, the risk of dying in the same period is smaller at 5% and 4% respectively. (Assumes non-smoker. The risk for a smoker is greater. Statistics correct at 21/12/2022)


    You can assess your personal risk by using this calculator. Then, why not come back to us for no-obligation quotations.

  • How do I make a claim on my Critical Illness policy?

    If you have been diagnosed with one of the critical illnesses covered in your policy, you should contact

    your insurance company and provide the details of the doctors treating you.