Critical illness cover is a type of protection that pays out a lump sum in the event you are diagnosed with a certain illness or disability. Just like death, illness or injury can happen at any time in life, and could leave you and your loved ones struggling to make ends meet.
No matter your financial situation, it's always handy to have cover, especially if others depend on you. In this guide, we'll explain critical illness in further detail as well as answer some of the key questions you may have.
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What is critical illness insurance and how does it work?
Critical illness insurance is designed to provide financial support if you are diagnosed with a serious illness, injury or disability. When you are diagnosed with a condition covered by the policy, your insurer pays out a tax-free lump sum. This money could be used to support you and your loved ones if you are unable to work or require additional care.
The main purpose of this payout is to alleviate the financial stress that can come with a significant health challenge, allowing you to focus on your recovery or manage your health better.
Most policies have a certain timeframe before you can make a claim, typically 10-14 days. Unlike life insurance, the policy does not pay out for death. Instead, it acts as a safety net, covering a range of specified illnesses such as heart attack, stroke, and cancer.
When you take out a policy, you choose how long you want it to last. The policy then pays out, provided you are diagnosed within this time. Once you reach the end of the term, the policy expires, and you won't be able to make a claim for any future diagnoses.
Types of critical illness cover
There are two distinct types of critical illness policies to choose:
Level cover: The amount you’re insured for stays the same throughout the policy term. This means that if you’re diagnosed with a covered illness at any point during the term, the payout will be the full amount you originally chose. People often choose this cover if they want a fixed lump sum to help replace income, cover living costs, or provide financial support for their family.
Decreasing cover: The amount you’re insured for reduces over time, usually in line with a repayment mortgage. Because the payout reduces, premiums tend to be cheaper than level cover. This policy is ideal if you want protection that matches the outstanding balance of a mortgage or large loan, so debts can be cleared if you fall seriously ill.
What does critical illness insurance cover?
The list of conditions covered will differ from provider to provider. For example, some insurers may cover conditions like dementia and Parkinson’s disease, while others might not.
Amongst the most commonly covered conditions are:
Certain types of cancer
Heart attack (of specified severity)
Stroke (resulting in permanent symptoms)
Multiple sclerosis (MS)
Motor neurone disease (MND)
Major organ transplant (e.g., heart, lung, liver, kidney, pancreas)
Blindness (permanent and irreversible)
Deafness (permanent and irreversible)
Loss of limb(s)
Loss of speech (permanent)
For a detailed list of what's covered, please see our guide: What illnesses does critical illness insurance cover?
How much critical illness cover do I need?
Just like life insurance, the amount of cover you need will depend on your personal circumstances. Everyone has different financial responsibilities and needs, so it's essential to consider what expenses you would need help covering.
For some people, this might mean matching the cover amount to their outstanding mortgage, so their home is secure if they can’t work. For others, it might mean covering several years of lost income or ensuring children’s education and household bills are taken care of.
If you're unsure about how much cover you may need, ask yourself:
Would my family be able to keep up with mortgage or rent payments?
How long could we manage on savings alone?
Would my partner or dependents need ongoing financial support?
Are there other large commitments, like school fees or loans, that need to be covered?
Do you have sickness cover through work as part of your employee benefits package?
Having more cover isn't always better, often meaning higher premiums, which might strain your budget. A good approach is to choose a realistic level of protection that would remove the biggest financial pressures from your loved ones without stretching your budget.
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How much does critical illness insurance cost?
Premiums for critical illness insurance typically depend on factors such as:
Age
Health - including any pre-existing conditions
Occupation
Length of cover
Desired payout amount
Generally, the younger and healthier you are when you take out a policy, the lower your premiums are likely to be. Insurers assess these factors to determine the risk of you making a claim and price the policy accordingly.
For example, if you have a pre-existing medical condition at the time of applying, you may be required to pay higher premiums. In some cases, the condition might be excluded from the cover altogether. Always make sure to review the terms of the policy carefully to understand any exclusions or special conditions that might apply.
Can I get life insurance with critical illness cover?
Many insurers offer the option to combine life insurance or life assurance with critical illness cover. This means you’re protected if you’re diagnosed with a covered critical illness during the policy term, as well as if you pass away.
It can be a convenient choice, as you only pay one premium and manage one policy, rather than having two separate plans. For families, this combined cover can provide peace of mind that loved ones will be financially supported no matter what happens.
However, it’s worth noting that most combined policies only pay out once. This means if you make a successful claim for a critical illness, there wouldn’t be a further payout if you later passed away.
Is critical illness cover worth it?
Whether critical illness cover is worth it will depend on your personal circumstances, but for many people it can be a valuable safety net. A serious illness can have a huge impact not just on your health, but also on your finances.
Knowing that you and your family could receive a lump sum if you were diagnosed with a serious condition means you don’t have to worry as much about how bills will be paid or how debts will be managed.
Of course, critical illness cover won’t be right for everyone. If you have no dependents, a very low mortgage or rent, or significant savings you could fall back on, you might feel you don’t need the extra protection. But for most people with financial commitments or family responsibilities, the reassurance of having cover often outweighs the cost of the monthly premiums.
There are also policies that can be helpful such as income protection.
How to get critical illness cover through Cavendish Online
You can apply for critical illness insurance with Cavendish Online in three simple ways:
1. Apply online
Best suited if you have no medical disclosures and want a straightforward application.
The amount of critical illness cover must match your life cover (you can’t apply for a lower amount of critical illness cover).
To add it, simply select critical illness as a policy extra once you’ve received your quote for life insurance.
Keep in mind: only a limited range of providers and policies are available online. For more choice, it’s worth using our phone-based services.
2. Apply over the phone with guidance
Ideal if you know roughly what you want but prefer to go through the process with a person.
Our Guidance team can give you quick quotes and help complete your application.
Unlike the online route, you can choose different levels of critical Illness and life cover.
01329 248735
(Monday to Thursday 10am – 7pm, Friday 10am – 6pm)
3. Apply over the phone with advice
Recommended if you have medical disclosures, a high-risk job, or if you’re unsure which policy suits you best.
Our Advice team will spend 15–20 minutes (sometimes longer) discussing your needs in detail.
They’ll then research the market and recommend policies tailored to your situation.
You can set different amounts of life and critical illness cover, or even arrange a standalone policy if that’s what you need.
You can call our friendly and knowledgeable advisers on
01392 436193
(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)
