Facts about critical illness cover

16 May2021

Nobody expects to become critically ill. You commonly hear people who are critically ill say things like "I never thought it would happen to me." This could mean that people don't have the right safeguards in place to support themselves and their family if they were to become incapacitated by a medical condition.

For example, it is a commonly quoted statistic that one in three people in the UK will develop cancer in their lifetime. Critical illness cover could pay out a tax free cash sum upon the diagnosis of a relevant critical illness. This could go a long way to help pay your mortgage, support your family, or change your lifestyle to accommodate your condition.

Why might people be unwilling to buy critical illness cover?

The prevailing mentality of "it won't happen to me" is a large contributing factor. It is also confusing because there are so many different policies and they all cover different critical conditions. It can be very hard to decide which one is right for you.

Which illnesses are covered by critical illness policies?

It usually varies depending on your policy. Conditions that are commonly included are illnesses such as Alzheimer's, advanced cancers, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. Additional illnesses covered vary, so it is important to read the key facts document of your policy carefully. For example, the majority of insurers cover advanced cancer but not all of them will pay out for cancer in its early stages. Although it is important to find a policy that will give you adequate cover, you may wish to avoid paying for policies that cover a huge list of illnesses that you would never even be exposed to. For example if you do not travel a lot, you probably don't need a policy that covers every single tropical disease.



What is not covered?

Insurers rarely cover illnesses that they consider to be self inflicted. This usually includes conditions stemming from drug or alcohol abuse. You are also unlikely to get a payout if you become injured or ill as a direct result of taking part in extreme sports. HIV/AIDS is usually only covered if contracted because of a physical assault, an eligible occupational hazard or a UK blood transfusion.

How much does it cost?

That depends on your policy. Many insurers allow you to purchase critical illness cover on top of your life insurance policy for a cost that is potentially lower than purchasing life insurance and critical illness cover separately. The cost is also affected by you individually. For example if you are older, male (women live longer on average which sometimes lowers the cost of their premiums), have a dangerous job, or have any relevant conditions in your family's medical history, you may have to pay more. Being a smoker or having a high BMI could also have an effect. Many insurers now offer to extend your cover to your children for no extra cost. This is well worth thinking about if you have children.

Click here for more information on critical illness insurance.

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