A Complete Guide to Critical Illness Cover

author image - cai

By Cai Bradley

on Friday 7 June 2019

Cancer patient mother with her daughter

Getting your head around life insurance and critical illness cover can be difficult, which is why our team are on-hand to help guide you through the process. Here, we answer all your critical illness insurance questions, including:

What is critical illness cover (UK)?
How much critical illness cover do I need?
What does it cover?
How much is it?
Is it worth the cost?
Can you get critical illness cover without life insurance?
Pros and cons of critical illness insurance
The best critical illness cover

What is critical illness cover and how does it work?

Critical illness cover (CIC) is a type of insurance policy that provides the policyholder with a lump-sum pay-out if they are hit with an illness defined as being ‘critical’ according to the insurers, typically including conditions such as Parkinson’s disease, strokes, heart attacks, and many more.

Policyholders will only receive the pay-out if they are diagnosed during the policy term with a condition that is listed on the predetermined contract as a critical illness.

The length of the policy term is determined when you take out the insurance, but most individuals typically opt for cover that lasts until certain milestones – when your children have grown up, or when you have paid off your mortgage, for example.

Due to the nature of its timescale, critical illness cover can be added onto a standard life insurance policy, such as term life or whole of life insurance. However, you’re usually only able to claim once if you decide to have a combined policy, so you may want to consider having a standalone critical illness cover without life insurance instead.

How much critical illness cover do I need?

People opt to take out critical illness insurance for a variety of reasons, and the amount you need generally depends on your personal situation and needs.

The best way to decide whether or not you should take out critical illness cover is by weighing up the benefits of the payout against the monthly cost. If you have no dependants other than yourself, you may take out critical illness insurance to ensure that you can keep on top of your mortgage and other monthly bills in the event of you becoming severely ill. Many mortgage applications require you to have some sort of cover – usually decreasing term insurance, and you can choose to have a CIC policy to provide that extra level of cover if you wish.

Do I need critical illness cover if I have no mortgage? Although you’ll find that critical illness insurance is often sold alongside mortgages and other financial products, it’s not legally required that you have a policy in place. But, CIC provides a welcome peace of mind as you know that the pay-out will help you cover your outgoings – including your mortgage – if ever you are too ill to work.

Being ill can bring about certain costs that you may be unable to cover if you are out of work (such as home modifications, car modifications and mobility aids to help with your condition), but critical illness insurance can help cover these expenses while you’re still around, unlike standard life insurance.

People with children are also likely to pay for critical illness cover to make sure that their family and dependants are provided for financially if they are unable to work as a result of the specified illness.

There are a few different types of critical illness insurance policies available, with most plans covering illnesses regardless of how severe they are. Although they’re less common, some other CIC policies are severity-based, where the payout depends on the severity of your illness.

Whatever is listed as a ‘critical illness’ in the agreement set out by the policyholder and life insurance provider, you will be covered for those specific illnesses only, so always make sure you are happy with the policy and exactly what you’re going to be covered for before you agree to it and start paying your monthly premiums.

Which type you opt for and how much critical illness cover you take out depends on your individual preferences, but you can speak to one of our friendly and experienced advisors here at Unite Life for some further personal guidance or a quote.

When to get critical illness cover

Critical illness insurance could be useful for you if:

  • You’re single and have no dependants. This is because you receive a lump sum to use while you’re alive, rather than leaving the pay-out behind to nobody (as you have no dependants), as basic life insurance would.
  • State benefits are not sufficient. You usually receive around £100 a week – which isn’t enough to replace most incomes in the UK.
  • You aren’t able to work but your savings aren’t enough to cover your usual outgoings.
  • There’s no long-term sickness pay package with your current employer.

What does critical illness insurance cover?

What critical illness insurance covers you for varies with each provider, so be sure to check the conditions of your policy before committing to anything.

So, what illnesses are covered by critical illness insurance?

Although they may differ slightly, policies often pay out if you are struck with the following illnesses:

  • Some types of cancer*
  • Heart attacks
  • Strokes
  • Major organ transplants
  • Blindness or deafness
  • Parkinson’s Disease
  • Severe head injuries
  • Bacterial meningitis
  • Multiple sclerosis
  • Loss of limb(s)
  • Paralysis

With many life insurance providers, the list goes on – just remember to check the specific illnesses you’ll be covered for. If you suffer from a serious illness that isn’t on your insurance policy, you will not be covered.

*Some cancers are not covered by critical insurance policies due to there being such a wide range of severities and types, but we will be sure to walk you through exactly what your policy includes and excludes before you commit to it.

Some critical illness policies also refuse to cover illnesses that occurred as a direct result of a pre-existing condition, which is why you must be totally honest during the application process when declaring your medical history, so that we can determine whether or not your policy will fully cover you. 

Providing medical history for critical illness insurance

In order to receive a critical illness cover quote, you will need to provide details of your medical history to insurers so that they can determine how much of a risk you are to them and the cost of the premiums you will pay.

Although it may seem tempting to avoid disclosing any past illnesses to get a cheaper insurance premium, it will leave you worse off in the long-run. Being untruthful in your insurance application will more than likely lead to a claim on your policy being refused, meaning that you won’t receive a payout and essentially, you will have wasted all the money you paid into the policy, so you must remain completely honest throughout the life insurance application and make sure you provide all the necessary details asked for.

The cost of critical illness cover in the UK

The cost of life insurance in the UK generally depends on the amount of cover you need, the type of policy, the length of the policy, as well as your age, health, medical history, occupation and lifestyle.

Most people get critical illness cover as an added policy on top of their standard life insurance, acting as an added level of reassurance for the policyholder.

A life and critical illness cover policy worth £100,000 for a non-smoking, healthy 30-year-old would typically cost around £25 a month over a 20-year term, according to reports. Life and critical illness policies can be cheaper for younger individuals, due to the lesser risk they usually pose, so it’s worth weighing up your life insurance options as soon as you take out a mortgage or have children of your own that depend on your income.

You’re likely to pay more for your premium if you:

  • Have a history of illness
  • Have family members with serious illnesses
  • Are being treated for pre-existing medical conditions

Make sure that you are able to afford the monthly instalments from the beginning because critical illness policies will not pay-out if you have not paid your premiums, leaving you with nothing and throwing your hard-earned cash away.

Do I need critical illness cover?

Whether critical illness cover is worth it or not depends on your personal situation, as we mentioned previously. However, if you’re considering critical illness insurance, you should ask yourself – could your family cope financially if you were unable to work due to illness? Or could you cover your mortgage if you live alone?

No one wants to think about it and no one thinks it’ll happen to them, but people are struck by critical illnesses each day and the unexpected can always happen. It’s hugely important to have plans in place for if the worst should happen, so that you are able to cover your financial commitments and your dependants can continue living comfortably without your usual earnings. Although it’s inevitably already stressful being diagnosed with a critical illness, having some financial security can make a huge difference in softening the blow, knowing that your bills will be paid and loved ones taken care of.

What is a good critical illness policy?

It’s important to let us shop around for you before you commit to a critical illness policy, as some can be better and more suited to you than others.

We’ll look for policies with fixed premiums – meaning that the amount you pay for cover stays the same throughout the term of your policy, so you won’t face premium increases and can budget more accurately. Policies without fixed premiums are likely to rise at some point, so it’s certainly worth looking for fixed-premium insurance.

Some policies also offer cover for the policyholder’s children, meaning that they will be protected under their parent’s insurance and a lump-sum pay-out will be administered if they fall critically ill.

More than anything, we will look for the best critical illness policy to suit your individual needs, so be sure to give us a call and provide us with all the information we require to retrieve the most suitable deal for you. 

Can you get critical illness cover without life insurance?

Life insurance and critical illness cover are different; critical illness cover pays out if you are diagnosed with a specific illness, whereas life insurance only pays out if you pass away during the policy term, so there are obvious benefits with both. Many people opt to use a critical illness policy as an additional type of cover alongside basic life insurance, in order to reassure them that they’ll receive a pay-out if they become critically ill.

However, you are in no way required to pay for both and can opt to take out one without the other easily here at Unite Life.

In short, there is no reason why you can’t take out critical illness cover without life insurance in the UK – it’s entirely down to your needs and what cover you feel is necessary for your situation.

It’s also worth noting that you could even get cheaper critical illness cover if you combine it with a basic life insurance policy – so get in touch with our team for more information and advice!

CIC can be taken out ‘in addition to’ or ‘combined with’ your life insurance policy, but there is a slight difference between the two terms.

Additional cover, when you take out life insurance policy with critical illness cover as an added extra, means that you will receive a payout if you get a critical illness and if you pass away.

Combined cover, on the other hand, means that you will only receive one pay-out, if either you pass away or become critically ill.

The benefits of critical illness insurance

There are pros and cons to critical illness insurance, just as there is with all types of policies, but we feel that the pros far outweigh the cons, as you see in our list of benefits below.

Critical illness insurance:

  • Pays out while you’re still alive
  • Covers a wide range of illnesses
  • Provides financial security for loved ones and yourself during a difficult time
  • Includes a fixed lump-sum which is agreed when you take out the policy
  • Can be bought alongside basic life insurance

Unlike life insurance, the policyholder actually benefits from the pay-out as it can be released as soon as they are diagnosed with a critical condition listed within their policy (while standard life cover usually only pays out if the policyholder passes away).

Due to this benefit, critical illness insurance is a legitimate insurance option for both those with a family and those without any dependants.

In terms of cons, well, there aren’t too many. Critical illness cover may not be as useful if you have no financial commitments, but neither is any type of life insurance. You do, however, need to be aware that not every illness is covered, and you may not receive a pay-out if you’re diagnosed with something that is not listed on the policy agreement.

Is income protection better than critical illness cover? Well, that depends on your personal situation. You may find that income protection insurance is more suited to you as it pays out if ever you are out of work due to illness, injury or (occasionally) unemployment.

In which case, our trained advisors can also discuss these options to determine what type of cover is best suited to you; simply get in touch using the freephone number at the bottom of this article.

If you already have a critical illness policy and aren’t happy about what’s covered within it, we can review the policy for you here at Unite Life and we may even be able to find you a better deal than what you currently pay.

See 'Critical Illness Insurance Pros and Cons' for a full guide to the benefits and potential drawbacks of CIC. 

The best critical illness cover in the UK

Here at Unite Life, we are a life insurance broker with experienced and friendly advisors on-hand to help you with all-things relating to life insurance and critical illness cover. Not only will we look for cheap critical illness cover for you, we will use our expertise to find you the best critical illness cover in the UK to suit your personal needs and cover you fully should the worst happen.

It’s important to remember that the cheapest critical illness insurance may not always be the best option, as you essentially get what you pay for with insurance, so it’s important you have the right cover in place.

This is why our advisors are available to help you get the best deal, so you get extensive life cover with the most affordable and cost-effective policy. 

Of course, the cost of critical illness cover varies between each policyholder, as there are a wide range of factors that influence the premium you pay. But, at Unite Life, we will do all we can to help you find your desired level of cover with a premium that’s firmly within your budget.

We hope you found use in our critical illness cover guide, and if you want to know more about the services we offer here at Unite Life or you want a life and critical illness cover quote, simply call us or complete our short contact form today and we will be in touch at a time that best suits you.

As we are an insurance broker, we are able to compare critical illness cover quotes for you from a variety of the best providers in the UK, to help you get the best policy available on the market.

Remember, getting in touch with our friendly advisors is completely free and you’re under no obligation!

08000 106 194

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