Diagnosis of a critical illness causes a lot of emotional devastation, but there can also be serious financial needs for you and those close to you.
What is critical illness cover?
Critical illness cover pays out a lump sum if you’re diagnosed with a specified life-changing illness or condition. Being diagnosed with a critical illness can have serious impacts on your work and home life.
Almost certainly, a serious diagnosis will disrupt your ability to earn and you and your loved ones may face additional costs to cope in a new situation: Critical illness cover (also known as critical illness insurance), is here to help lift that financial burden.
Do I need critical illness cover?
Being diagnosed with a critical illness can impact you more than just your emotional and physical health; it can also affect your finances. Realistically, you are going to be unable to work for some time in aid of treatment and recovery.
Critical illness cover is here to bridge the gap between any savings you may have, and your loss of income.
What’s covered by a critical illness policy?
Exactly what illnesses you are covered for, can differ between insurers – which is why it’s important that you speak to one of our protection advisers, before taking out a policy. You will need to be diagnosed to a certain severity for your policy to pay out.
Most policies cover, but aren’t limited to:
- Heart attacks
- Cancers
- Strokes
- Multiple Sclerosis (MS)
- Parkinson’s
*It is important that you thoroughly read your policy documents to determine exactly which illnesses you are covered for, and to what severity.
You can get these by contacting your insurer directly, or by speaking to one of our advisers.
What isn’t covered by a critical illness policy?
Your policy documents will make it clear exactly what conditions and illnesses are covered. If it’s not listed, then it’s not covered.
Each insurer is different, but the conditions that are typically not covered are:
- Pre-existing conditions
- Hereditary illnesses (e.g. muscular dystrophy, sickle cell disease, Huntington’s disease)
- Diagnosis of a terminal illness
- An illness arising within the first 14 days of taking out your policy
- Some types of cancers
If there is a certain illness that you want to cover, speak to one of our advisers who can recommend a suitable insurer for your circumstances.
How much critical illness cover do I need?
At a basic level, a small amount of critical illness cover is better than nothing if you’re worried about developing a serious illness at some point in the future, and the financial consequences that could arise from this.
One rule of thumb for calculating it, is to multiply your annual income by three. You might be forced to stop working as a consequence of a serious illness, so the amount of cover should allow you to stop working for up to three years, whilst continuing to pay all of your usual mortgage or rent payments and other bills as you recover.
How much does critical illness cover cost?
Critical illness insurance is more expensive than life insurance. This is simply because you’re more likely to claim on a critical illness insurance policy than you are on a life insurance policy.
There is many factors which can determine the cost of your insurance policy:
- Your age
- Your health status
- Amount of cover
- Your lifestyle
Use our quick life cover calculator to get started
Can I get critical illness cover with a health condition?
It can be difficult to get critical illness cover if you have a pre-existing condition. This is because insurers will deem you a higher risk of becoming critically ill due to this condition.
You may, however, be able to get critical illness cover with an added exclusion. This essentially means that you will be able to claim and receive a payout for an illness that has nothing to do with your pre-existing condition. Alternatively, you may be able to get cover but may have to pay a higher premium due to the increased risk.
Remember - each insurer is different and with no one-size-fits-all policy, it’s not always impossible to find the cover you need! However, it is worth being aware of how pre-existing conditions can make taking out a policy a little trickier than usual.
- Cancer
- Mental health
- Asthma
- Diabetes
- Stroke
- Heart attack
Combining life insurance with critical illness cover
Combining both life insurance and critical illness cover is always recommended. Not only do you double-up on your cover, there's also no "survival period" which comes as standard with most standalone critical illness policies.
At a very basic level, both products essentially do the same thing, they provide a tax-free lump sum amount of money to protect you and your loved ones should the worst happen. The key difference between life insurance and critical illness insurance, however, is the stage at which a payout is made.
A life insurance policy pays the benefit when you die, whereas a critical illness insurance policy will pay the benefit when you fall ill, providing that you have fallen ill with one of the critical conditions covered by the policy, which as standard will include cancer, heart attack and stroke.
People sometimes choose to buy two separate policies, one life insurance and one critical illness insurance policy. This is a good way to get a bit more flexibility. For example, you may want a life insurance policy to cover your mortgage, should you pass away, but only want a small amount of critical illness insurance to supplement the family income for a number of months if you were to fall ill.
Having two separate policies gives you and your family that additional layer of protection and peace of mind.
Children's critical illness cover
Whilst most critical illness policies cover children automatically, some policies charge an additional fee for children, whilst some don’t cover them at all. It’s a case of finding a policy that works for your individual situation.
The policies that do cover children will typically cover them from either birth or 30 days old, to 18 or 21 years of age, and will cover them whether they are your children by birth, adoption or marriage. An important thing to consider when shopping for your policy is that health conditions from birth, conditions that pre-date the start of the policy, and hereditary illnesses normally will not be covered.
Just as it does for adult policy holders, you’ll get paid a cash lump sum if your child is diagnosed with one of the covered illnesses, although it’s worth noting that the payouts for children are typically smaller than the payouts for adults - which makes sense as your children don’t have to pay a mortgage.
If you claim against your policy for your child, you can expect between 20 - 50% of the adult rate, topping out at a maximum of £25,000. All this is of course dependent on the policy you buy.
You might think that your kids don’t need critical illness cover. After all, they don’t have car payments or rent to cover or dependents to care for. But you do. If your child is critically ill, it’s very possible that you or your partner may need to take substantial time off work or perhaps even leave your job in order to care for them. They may need full time care at home, or frequent hospital visits, or even trips across the country or abroad to see specialists.
How LifeSearch can support you
LifeSearch are an independent intermediary provide you with top customer service and ongoing support should you ever need it.
We're independent
We offer expert, fee-free advice with no obligation. We do all the leg work for you, but will always keep you in the loop.
Here for you
We work for you and not the insurer - which means it's our job to listen to your needs and search the market for the policies and providers, best suited to you.
Claims
If you need to claim, we'll do it for you. We have a dedicated claims desk to support you and your family during life's darkest times - so you can get back to what matters.
A Little more about LifeSearch
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Without LifeSearch in your corner that’s a lot of reading … reading you don’t have to do.
Frequently asked questions about critical illness cover
New equipment
With a new health situation, you may need to sink significant cash into buying clothes, items and equipment that make daily life more comfortable.
Home modifications
If mobility is suddenly an issue, your home may need to be adapted to improve access, move rooms or generally be reconfigured to match your new needs.
Impact on income
If you’re diagnosed with a life-changing illness, you’ll almost certainly miss periods of work and you may have to give up work altogether. That could mean the end of your income.
Medical costs
The NHS may cover all your medical needs but additional medicines, therapies and treatments – or private care if you go that way – will add significant cost.
Travel and transport
If your condition isn’t treatable locally, additional transport, parking and fuel costs will mount up.
Your kids’ future
Without help absorbing the extra costs of illness, your life plans – and your ability to support the people you love – could be badly damaged.
If you’re diagnosed with a disease or condition that’s covered by your policy, just let LifeSearch know and we’ll claim on your behalf.
We were one of the first UK intermediaries to set up a dedicated in-house claims team, so we’re here to handle the paperwork for you. It’s one less thing for you to do when you’ve got bigger things going on.
We’ll liaise as much as possible with your doctors and deal directly with the insurers; always aiming for as swift a pay-out as possible. We’ll let you know if we need additional information or medical notes and keep you updated all along the way.
You'll need to know the following details in able to make a claim:
- Nature of the diagnosed illness
- Date of diagnosis
- Details of any treatment
- Contact details of any treating consultant
- Your contact details
Click here if you need to speak to our claims team.
If it is an employee benefit or scheme, you will pay tax - how much tax, relates to how much of your policy your employer covered.
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