Our Guides On Insurance
Critical illness insurance is a long-term insurance policy designed to pay a lump sum or income on the diagnosis of certain life-threatening or debilitating (but not fatal) conditions such as a heart attack, stroke, certain types/stages of cancer, multiple sclerosis and loss of limbs.
The illnesses covered will be specified in the policy along with any exclusions and limitations – these differ between insurers. Critical illness policies usually only pay out once, so are not a replacement for income. You can use the payout to pay for medical treatment, pay off your mortgage or anything else
When should you consider buying it?
Many people buy critical illness insurance when they take on a major commitment such as a mortgage. This is something our expert advisors are happy to discuss with you.
Important points you should think about
- Critical illness insurance pays out if you are diagnosed as suffering from one of the specified illnesses
- Policy summaries will often set out a list of illnesses covered, but this is only a guide and full details will be in the policy document. This will also set out the criteria that have to be met before the insurer will pay a claim, including defining the level of severity of the illness
- It does not cover simply any sickness that affects your ability to work – it is specific about which illnesses are covered.
- It differs to other types of protection insurance such as income protection or payment protection, so make sure you understand what it does and whether it is right for you
- Many insurers now provide a plain English guide to the illnesses covered. Ask our advisors if they have one that explains the policy they have recommended
- If the insurer imposes any other conditions, perhaps because of your own or family medical history, you should be told what they are before you take out the policy
- Detailed policy terms and conditions will be provided in the policy document the insurer will send you after you take out the cover – make sure you read it so that you know what you're covered for
- It's essential that you give full, honest answers to questions you are asked about both your own and family medical history. Giving incomplete or wrong information could invalidate your policy and any claim you make on it
- If you are not sure, it is better to mention things. Otherwise you will not be aware of what the policy may or may not pay out until you make a claim