Critical illness cover is one of the most talked-about protection products and also one of the most misunderstood. People are not always sure what it actually pays out for, whether they need it, or how it fits alongside other cover they might already have. This guide sets out the basics clearly, so you can make a properly informed decision.

What Is Critical Illness Cover?

Critical illness cover is a type of insurance that pays out a tax-free lump sum if you are diagnosed with one of a specified list of serious conditions. The list typically includes certain cancers, heart attacks, strokes, multiple sclerosis, and a range of other significant conditions. The exact conditions covered vary between insurers and policies, which is one of the reasons it pays to compare properly across the market rather than going to a single provider.

The payout is yours to use however you need it. Some people use it to pay off their mortgage so they are not under financial pressure while they recover. Others use it to adapt their home, cover private treatment, replace lost income, or simply give themselves and their family breathing room at a difficult time.

What Does It Not Cover?

Critical illness cover does not pay out for every illness or injury. It only covers the specific conditions listed in the policy, and the diagnosis must meet the policy’s own definition of that condition. This is why reading the policy carefully matters, and why we always take the time to go through the detail with our clients rather than simply comparing headline prices.

It is also not the same as income protection. Income protection replaces a proportion of your salary on a monthly basis if you cannot work. Critical illness cover pays a one-off lump sum on diagnosis, regardless of whether you return to work. Many people benefit from having both, depending on their circumstances.

Who Is It For?

Critical illness cover is relevant to most working adults with financial commitments, particularly those with a mortgage, dependants, or limited savings to fall back on. It is often associated with older age, but the opposite is true when it comes to cost: the younger and healthier you are when you take out a policy, the lower your monthly premium tends to be.

It is particularly worth considering if you are buying a home for the first time. Arranging cover alongside your mortgage means you are protected from the start, and the premiums are typically at their lowest when you are young and in good health.

How Much Does It Cost?

The cost of critical illness cover depends on your age, health, whether you smoke, the level of cover you want, and how long you want the policy to run. Policies from leading insurers such as Aviva can also include additional benefits at no extra cost, including access to a GP service, second medical opinion services, and mental health support.

Because we are whole of market, we compare across all the leading insurers to find the most suitable policy for your circumstances and budget. A quote takes a matter of minutes, and the cost is often lower than people expect.

How Does It Fit With Life Insurance?

Life insurance and critical illness cover are different products that serve different purposes. Life insurance pays out if you die during the policy term. Critical illness cover pays out if you are diagnosed with a specified serious condition, regardless of whether that condition is life-threatening.

Many people choose to hold both: life insurance to protect their family if they die, and critical illness cover to protect their finances if they become seriously ill but survive. Some policies combine the two, which can work well for some people, though combined policies are not always the best value and are worth comparing carefully.

What Should You Do Next?

The most useful thing you can do is have a straightforward conversation about your circumstances and what you are trying to protect. There is no obligation and no pressure. We will look at what you already have, identify any gaps, and search across the whole market to find cover that fits your life and your budget.

Frequently Asked Questions

What does critical illness cover pay out for?

It pays a tax-free lump sum on diagnosis of one of the specified conditions listed in your policy, which typically includes certain cancers, heart attacks, strokes, and other serious conditions. The exact list varies between insurers.

How much does critical illness cover cost in the UK?

The cost depends on your age, health, lifestyle, the amount of cover, and the length of the policy. Premiums are generally lower when you take out cover younger. We compare across the whole market to find the most competitive option for your situation.

What is the difference between critical illness cover and income protection?

Critical illness cover pays a one-off lump sum on diagnosis of a specified condition. Income protection pays a regular monthly income if you cannot work due to illness or injury, for as long as the policy allows. They work differently and many people benefit from considering both.

Contact Riviera Mortgages to find out which protection cover is right for your circumstances.