What is Critical Illness Insurance Cover?

With critical illnesses affecting 25% of men before retirement age and 20% of women, is getting cover right for you? This article seeks to answer some of the most common critical illness insurance questions and aid readers in deciding if it is for them. Whilst this article is no substitute for personalised professional financial advisor advice, it will give you an overview of some things to consider when doing a critical illness policy comparison or quote.

What is critical illness insurance?

Critical illness insurance is a lump sum payment that is made in the event you suffer from an illness, induced disability or loss of limb that curtails your life. The individual illnesses and degrees of disability are listed in the insurer’s terms and conditions and may vary from policy to policy. This is why it’s vitally important to compare critical illness insurance via the use of a critical illness insurance quote.

Confised.com is a great place to start comparing policies.

If you fall victim of a critical illness referred to in the policy during the active term, you’ll receive a tax free lump sum. It should be noted that it is essential you keep up your monthly payments during the term in order for your policy to remain valid. Cancelling critical illness policies to avoid costs could be a huge false economy.

What is critical illness insurance cover and how does it work?

Most people decide they want some form of financial back up plan in the event of the unthinkable. This could be cover to last until dependents are old enough to be…well, non-dependent. Similarly, those buying a policy could be seeking to cover the single biggest debt most families have – a mortgage.

This sort of policy can often be offered as part of a policy written into a combined term life insurance policy. What this ultimately means for most is that in the event of getting a payout for a critical condition such as a heart attack, stroke, cancer or MS the subsequent life cover won’t pay out too should you die later. It’s a “one or the other” kind of policy. For full peace of mind many look into separate policies for both.

Critical illness cover can be bought for a number of reasons. Some policy holders take it out as a requirement of certain mortgages. It’s also an important consideration for those who are single, have young dependents and are heavily dependent on a working family member. In the event of the unexpected, the funds from a payout can help bridge the income gap, adapt a home for a disability or pay for care.

Savvy Side Read: While comparing financial items, why not make your energy bills more efficient with a Bulb referral code or Octopus Referral Code.

Critical illness insurance – what is covered?

The illnesses covered vary policy to policy which is why it’s always worth trying to compare critical illness insurance policies. When you get a critical illness insurance quote the main illnesses you should expect to see covered may include (but are not limited to):

  • Benign brain tumor
  • Cancer and Leukemia
  • Heart attack
  • Stroke
  • Coronary artery issues
  • Total Permanent Disability (ie – potentially loss of limbs)

What critical illness insurance covers

It can be that people avoid getting critical illness insurance cover because they’re worried that their illness won’t be covered. This is a completely valid point of view as one of the main reasons for payouts being denied is the claiming for an uncovered illness. This is why it’s vitally important to check and compare your critical illness insurance policies and their terms and conditions.

Severity of critical illness is also something to look into carefully when it comes to critical illness insurance comparison. This is due to the fact cover for conditions, such as loss of limbs, will depend greatly on which limbs are affected and the amount they are affected. This maybe a similar case for certain cancers and invasive conditions. It’s important to understand the terms and conditions of your policy and what degree of critical illness will allow you to claim successfully for a payout. Again, I cannot reiterate enough how important it is to compare your critical illness policies.

Terms like “Total Permanent Disability” are also worth checking on a policy to see what profession or work skills are covered. Some policies for example will expect you to find a suitable profession to work in before claiming while others will pay out if you cannot continue your existing job.

There may also be additional clauses in your policy that affect a successful payout. One example of this may be self-inflicted injuries or conditions as the result of drug usage. As always when setting up a policy be honest from the outset. There’s no sense and having a policy based on lies or flawed information. Using false information can lead to your policy being completely worthless for a claim when you really need it.

Should I get Critical Illness insurance and is critical illness insurance worth it?

If you’re in the sort of family set up where you depend heavily on a main wage or salary, critical illness cover may be for you. This is particularly important if you have a large mortgage, debts to cover and dependents of any form. If you are financially secure with low or no debts and a reasonable disposable income then CI cover is less likely to be a priority. Maybe the best way to approach considering critical illness cover is to work out what you would be able to live without in the event of a diagnosis. If there’s a large amount of things you find you would stand to lose, then critical illness cover is essential.

As long as the cover is fit for purpose, then critical illness insurance cover can provide a lifeline to those needing it. You’ll need to balance out the monthly premium cost against how much you will get back over the term of the policy. But for most critical illness cover may be beneficial as the aforementioned lifeline.

Pros, Cons & Disadvantages of critical illness insurance


  • Monthly payments and terms meaning no lock in fee and easy to shift to better offerings.
  • Peace of mind for those with dependents.
  • Provides support for debts, loss of wage via TPD and funds for provision of care.
  • Lots of bespoke covers available.
  • More comparison sites are offering bespoke critical illness insurance quotes and comparisons.


  • Failing to keep your monthly payments active for you policy can leave your cover invalid and yourself unprotected.
  • Variety of terms and coverage in policies means CI insurance comparison is vital.
  • Critical illness insurance can often be build into a combined term policy. For example, alongside a policy with term life insurance. This means that it often only pays out on “one” of those occurrences – not both.
  • You’ll need clear, accurate information and evidence about illnesses and circumstances for payouts. Lack of evidence can lead to failed payouts.
  • Most payout on the condition being diagnosed, but some payout on severity of condition only. Check your severity you wish covered!
  • If using a comparison site to compare critical insurance quotes, it’s essential you to go directly to the insurance company to check their terms and conditions and the “auto-filled” data the comparison site has entered for you. Inaccurate data may lead to invalid cover.

Savvy 5 minute side-read: Smart home insurance and Buzzvault home insurance

Is coronavirus a specified critical illness?

This get a little vague but if a condition is caused as the result of coronavirus you may be covered under a critical illness insurance cover. However, in general, Coronavirus is not a defined “Critical Illness” on most policies. As you’ve probably noticed from the paragraphs in sections above, checking your policy is vital to know what is covered.

Is critical illness insurance taxable?

Receiving a lump sum from a critical illness insurance policy is not classed as an income. Therefore, by definition, it is also not referred to as taxable amount.

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