Critical illness insurance

Want to insure you and your family have enough money to get by should you fall critically ill and need treatment? We're here to help.

Cleerly provide bespoke advice


What is Critical Illness Insurance?

Critical illness insurance pays a lump sum to provide financial relief during treatment and recovery from a serious illness. The stress of unpaid bills is the last thing you need when recuperating, so this support provides independent professionals with the reassurance they need to financially support themselves and their families during challenging times.

The three most common claims for critical illness insurance are for cancer, heart attacks, and strokes.

In addition to these "big three" conditions, critical illness insurance typically covers anywhere from about 10 to over 100 serious or critical illnesses, depending on your insurer.

Other commonly covered conditions include multiple sclerosis, permanent loss of vision or hearing, loss of limbs, motor neurone disease, and organ failure or transplant. Each insurer defines these illnesses differently, setting a "threshold" for the severity required to make a successful claim.

Do I Need Critical Illness Cover?

Securing peace of mind

If you develop a critical illness, a Critical Illness insurance policy provides a lump sum payout. You can use it to repay a mortgage, cover bills, or adapt your home for a new disability—whatever the need, this cash can be a vital lifeline. Unfortunately, life's uncertainties mean a serious illness could occur at any time. Statistics indicate that the risk of many critical illnesses is increasing in the UK, even among younger, working-age individuals.

Critical Illness Statistics

  • In the UK, 1 in 2 people will be diagnosed with cancer during their lifetime (Cancer Research UK).
  • Every day, 280 people are admitted to the hospital due to a heart attack, which equates to one every five minutes (British Heart Foundation).
  • About 1 in 4 new cancer cases each year occur in individuals under 60 (Cancer Research UK).
  • Half of those born after 1960 will face a cancer diagnosis at some point in their lives.
  • In the UK, 107,800 people live with multiple sclerosis, with over 5,000 new diagnoses in 2016. Nearly two-thirds of those with MS are under 60, and over three-quarters of new cases in 2016 were among those under 60 (Multiple Sclerosis Society).

How does Critical Illness Insurance work?

An experienced broker, specialising in protection-focused insurances, can guide you through the process to choosing the optimal policy to cover your lifestyle, life stage, familial commitments, and cover requirements in order to find you bespoke cover.

Critical Illness policy considerations include:

  • Decide on the payout amount and coverage duration, such as until a mortgage is paid or up to age 75;
  • Complete a health questionnaire and disclose all pre-existing conditions during the application;
  • Insurers assess risk factors (e.g. job stress, family health history) to determine monthly premiums;
  • The policy allows one claim for a covered illness but does not pay out upon death;
  • The lump-sum payment is tax-free and can be used for any purpose, like mortgage payments or daily expenses;
  • Most policies pay out only once, ending the policy after a claim, including joint policies where only one person can claim.

How much Critical Illness Insurance cover do I need?

The amount of coverage you choose should align with your personal circumstances and budget. Here are some key factors to consider when determining your insurance needs:

  • Outstanding mortgage balance
  • Other existing debts
  • Daily living expenses for you and your family
  • Medical, nursing, or care home fees
  • Private medical treatment costs, including potential travel expenses for treatment abroad

Additionally, be mindful of Critical Illness Cover underwriting limits. Exceeding these thresholds may require you to provide further medical evidence, such as a GP report, blood tests, or a full medical examination, before your policy can be approved.

Feeling inspired?

Looking for comprehensive critical illness cover to protect your family?

Whether you’re looking to get the ball rolling on an application or you’re just after some friendly advice, don’t hesitate to give us a call on 02394 212912 or complete the form below.

What medical conditions are covered by a Critical Illness Insurance policy?

Many people assume a critical illness policy will cover any serious illness that prevents them from working, but this isn't the case. The definition of 'critical illness' varies between insurers, and some illnesses might not be covered at all. Even if certain cancers are included, only specific stages might be eligible. It's crucial to thoroughly read the terms and conditions before purchasing a policy.

Common inclusions in critical illness policies:

  • Specific types and stages of cancer
  • Heart attack
  • Stroke
  • Alzheimer’s disease
  • Parkinson's disease
  • Loss of a limb
  • Deafness
  • Blindness
  • Multiple sclerosis

What are Critical Illness Insurance policy exclusions?

Policies often have stipulations where they won't pay out, such as requiring a diagnosis of permanent symptoms. Coverage for some conditions might be withdrawn after a certain age or if symptoms were present before the policy was taken out.

Additionally, most policies exclude claims resulting from self-harm, alcohol or drug abuse, or participation in risky or extreme sports. There are usually time limits, such as not being able to claim within the first 90 days of the policy or if death occurs within a month of being diagnosed with a critical illness.

How Much Does Critical Illness Insurance Cost?

The most appropriate Critical Illness Insurance policy is highly bespoke to individuals' needs, which is why we recommend speaking to specialist Protection policy advisers to tailor cover to your circumstances.

The cost of Critical Illness Cover is influenced by a range of considerations, including:

 

Personal status

  • Age: The risk of critical illness increases with age.
  • Health Status: Your current health, including height, weight, and smoking status, affects the cost.
  • Medical History: Insurers review your medical history for past illnesses, which may lead to higher premiums or exclusions.

 

Policy Options

Decreasing or Level Cover

  • Level Term: The benefit remains constant, ideal for interest-only mortgages, ensuring full payout regardless of when illness occurs.
  • Decreasing Term: The benefit reduces over time, suitable for repayment mortgages, and is cheaper as the risk increases with age.

 

Guaranteed or Reviewable Premiums

  • Guaranteed Premiums: Fixed for the policy's duration, unless index-linked for inflation.
  • Reviewable Premiums: Subject to regular increases, potentially leading to significant annual hikes.

 

Single or Joint Cover

  • Joint Cover: Covers two people under one policy, usually cheaper than two separate policies but only pays out once.
  • Individual Policies: Consider separate policies for comprehensive coverage, especially when young and healthy.

 

Number of Critical Illnesses Covered

  • Check the number and definitions of covered illnesses, which can range from 10 to over 120, to ensure clarity and claim eligibility.

Income Protection Cover & Critical Illness Insurance Compared

Critical Illness Cover and Income Protection Insurance cater to different needs, leading to distinct differences between these insurance products. Here's a quick comparison:

Income Protection helps safeguard your income by providing a regular monthly benefit to cover bills if an illness or injury prevents you from working. This can be particularly appealing if you’re not eligible for statutory sick pay or if your income would decrease.

Critical Illness Cover offers a one-time cash payout if you're diagnosed with a serious or life-changing condition covered by the policy. This cash sum can assist with treatment and recovery time and can be used to pay off a mortgage or cover other daily living expenses.

Income Protection Insurance Benefits

  • Designed to pay out if unable to work due to illness or injury
  • No lump sum
  • Pays a monthly benefit for a valid claim
  • Pays out after a waiting period of 4, 8, 13, 26 or 52 weeks – it's up to you. Pay outs are monthly in arrears

Critical Illness Insurance Benefits

  • Pays out if you’re diagnosed with a specified illness
  • Pays a lump sum
  • Pays out once (for a valid claim)
  • A claim can be made if you survive for 14 days from diagnosis

 

Deciding how to protect yourself and your loved ones can be challenging but choosing either Income Protection Benefit or Critical Illness Cover, or both for comprehensive peace of mind, ensures you have financial protection and peace of mind. Cleerly's experts are on hand on 02394 212 912 for an obligation-free discussion.

Critical illness insurance FAQs

It's highly unlikely that you'll be covered for pre-existing health issues when you take out insurance. You must disclose all past medical conditions and doctor visits, even if they seem unrelated. Failing to accurately share your medical history could lead the insurer to claim they wouldn't have offered coverage if they had known, often resulting in a rejection due to "non-disclosure."

If a policy does cover pre-existing conditions, it may be more expensive and come with additional conditions. Your insurer should clearly communicate this before you purchase the policy.

Yes, there is a "cooling-off period", typically lasting between 14 and 30 days, during which you can cancel your policy and receive a full refund of any payments made.

Purchasing a critical illness policy isn't mandatory when you take out a mortgage. However, a Critical Illness Plan can offer a lump sum payment to help cover mortgage repayments if you're diagnosed with a covered critical illness during the policy term.

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