What is critical illness cover?

Put simply: it’s insurance that pays out if you’re diagnosed with one of the critical illnesses or conditions listed in your policy. It pays out as a lump sum which can help protect you against the financial impact a serious diagnosis can have – often significantly and unexpectedly. The most common claims on this kind of policy are for cancers, heart attacks and strokes, but most policies will also cover a range of other serious conditions, like multiple sclerosis, loss of limbs, major organ transplants, and so on.

How does critical illness cover work?

Critical illness cover pays you a tax-free lump sum if you’re diagnosed with one of the conditions listed in your policy. When you buy a policy, you agree to pay a monthly amount (known as the ‘premium’) in return for the lump sum (known as the ‘benefit’), which is paid out if you’re diagnosed.

Anorak takeaway

That’s how it works in simple terms – but there a lots of nuances when it comes to critical illness cover that could easily leave you confused. We’ll be covering them all in this guide, including the difference between standalone and combined cover; when a critical illness policy will and won’t pay out; as well as how and why so many people tend to buy critical illness alongside their life insurance. We’ll also explain how Anorak works out the best critical illness cover for you.

How much does critical illness cover cost?

A combination of factors determine how much your critical illness cover will cost. Some of these will be around the policy itself; some will be based on you and your lifestyle:

  • Contributing policy factors
    In terms of the policy itself, the cost of your critical illness cover will depend on how much cover you buy (often referred to as the ‘benefit amount’); the length of the policy you take out (known as the ‘term’); what type of cover you go for (whether the amount will always stay the same, go up, or go down over time); whether you add child cover or any other benefits; and, of course, how many critical illnesses the policy covers.
  • Contributing lifestyle factors
    And in terms of you and your lifestyle, the price of critical illness insurance is affected by your age and smoking status, as well as your personal and family health history. These health and lifestyle factors would all be considered during the insurer’s medical underwriting process – which is essentially a case of the insurer weighing up how likely it is that you’ll suffer from a critical illness during your policy term (and therefore how much of a financial risk you pose to them).

Can you get critical illness cover after being diagnosed?

Yes – you can always apply for critical illness cover, regardless of any previous diagnoses. But, as with any other application, you’ll be required to declare your health history when you apply, then go through the insurer’s medical underwriting process before being covered.

If you’ve been diagnosed with a critical illness before, or you have a pre-existing condition, there is a chance this could affect your eligibility for some policies. The insurer might refuse your application, or they might accept it but add a relevant exclusion into your policy conditions. A previous diagnosis could also affect the price of your premiums, making them more expensive. Why? Because in the insurer’s eyes, you’re perhaps more likely than other people to make a claim in the future, making you more of a risk to insure.

Anorak takeaway

It’s very important to be completely honest about your medical history when applying for critical illness insurance. If you’ve had a critical diagnosis before, make sure to declare it. That way, your policy is more likely to pay out if and when you need it to. If you don’t declare a previous diagnosis, you could end up having a claim rejected or, worse still, invalidating your policy.

Is critical illness cover worth it?

As with any kind of insurance, you might only decide that your critical illness cover was ‘worth it’ if the worst happens: you end up needing it. But whether or not you’re going to need it can be difficult to predict. None of us can know if, when, or how likely it is that we’ll be diagnosed with a critical illness at some point in the future.

If an unfortunate diagnosis did come your way, critical illness cover could make all the difference in how well you’re able to cope financially in the aftermath. It could be the difference between being able to keep up with your financial commitments and, if applicable, being able to carry on supporting anyone else who relies on you financially – or not.

The consequences of a diagnosis are also hard to predict, but they could include anything like being too ill to work; needing time off work for treatment; someone else needing time off work to support you; medical expenses; or perhaps even needing to make household alterations as a result of your diagnosis. Whatever it may be, critical illness cover provides a financial buffer that can be used however you need – freeing you up to concentrate on getting better by taking away some of the money worries. For lots of people, the peace of mind this provides means that yes: critical illness cover is worth it.


What illnesses does critical illness insurance cover?

Each critical illness policy will cover a unique list of illnesses – which is why you should always read the policy documents carefully to check what is and isn’t covered in yours. As a ballpark, a typical critical illness policy might cover:

  • Around 40-60 severe illnesses
  • Around 30-50 less severe illnesses
  • And, in some cases, up to around 10 child-specific illnesses (and potentially children’s cover for a number of the severe and less severe adult conditions too)

And the most common conditions covered by critical illness insurance are:

  • Cancer
  • Heart attack
  • Stroke
  • Organ failure
  • Loss of limbs
  • Loss of hearing or sight
  • Multiple sclerosis
  • Alzheimer’s disease
  • Parkinson’s disease

It may be the case that you see the same kinds of illnesses or conditions in more than one category, but the severity will be different (e.g. different kinds and/or stages of cancer). For adults, the severity of your condition will determine whether or not you receive the full payout – you can claim the full amount if you’re diagnosed with one the severe illnesses, but only a proportionate amount if you’re diagnosed with one of the less severe illnesses. Similarly, if your policy has them, children’s illnesses will usually only lead to a proportionate payout.

What's the critical illness lump sum for?

The lump sum paid out on diagnosis can be used however you need. The idea of this kind of cover is simply to help alleviate the often unexpected consequences of a critical illness diagnosis – on you and the people closest to you. Of course, these will vary from person to person, depending on your personal circumstances, what illness you’re diagnosed with, and what effect it could potentially have on your life.

If you’re too ill to work, for example, or you need time off work for treatment, the money could be used to cover loss of income. It could help cover the cost of multiple hospital trips, or of any household alterations you need to make as a result of your diagnosis or condition. It could also help cover childcare, or the care of any other relatives who usually depend on you. Ultimately, it can act as a financial cushion, freeing you up to deal with your condition without worrying about how you’ll keep up with the everyday cost of life.

What are the different types of critical illness cover?

There’s two main types of critical illness cover: standalone and combined. For both types of policies, you can either buy level, increasing or decreasing cover – which means the payout always stays the same, goes up over time, or goes down. Beyond that, here’s a quick breakdown of each:

  • Standalone critical illness cover
    This is an individual insurance policy that only covers you for illness (namely: the critical illnesses listed in your policy).
  • Combined critical illness cover
    This is a critical illness insurance policy combined with life insurance cover, meaning you’re covered for both illness and death – whichever happens first. This kind of cover can also be known as either accelerated or integrated critical illness cover. Remember: it only pays out the main benefit once, so if you claimed for a severe critical illness, you’d no longer be covered in case of death.

Is critical illness cover the same as PPI?

Working out the difference between protection insurance products can be confusing, but the quick answer to this one is: no. PPI – or payment protection insurance – is a short-term insurance policy designed to temporarily cover existing loan repayments (usually your mortgage). If you buy PPI, you’re usually covered for a maximum of 12-24 months, and the amount covered is the same as the amount of your loan repayments. Unlike critical illness cover, PPI is not medically underwritten.

What does critical illness insurance not cover?

If you’re buying a critical illness policy – or you need to make a claim on an existing policy – it’s important to know what’s covered, but also what’s not. There’s a few exclusions to bear in mind:

  • Illnesses not listed in your policy – This is straightforward enough: if you’re diagnosed with a serious condition that’s not listed by your policy, you won’t be eligible to make a claim.
  • Illnesses listed, but not meeting your policy's definition – This one’s less straightforward: most insurers will have a threshold for how serious a critical diagnosis needs to be before you’re eligible to claim on it.

These exclusions are the case for combined critical illness policies – but if you have a standalone policy, there can be more (on top of the ones listed above).

  • Terminal illness diagnosis – Standalone critical illness policies don’t tend to cover you for a terminal illness diagnosis (i.e. a doctor saying you only have 12 months or fewer left to live). For protection against this, you’d need life insurance, which usually comes with a terminal illness benefit – whether through life insurance itself or a combined critical illness policy.

    Death – Again, a standalone critical illness policy wouldn’t pay out if you died. For cover against this scenario, look into life insurance or combined critical illness cover.

Who needs critical illness cover?

There are many reasons why someone might choose to protect themselves with critical illness cover. If you have financial commitments, for example, or financial dependents (in other words, people who rely on you to keep up with the cost of life). Or if you’re simply nervous about the financial consequences of a diagnosis, and/or you don’t have any savings you could fall back on if you needed to. In any of these cases, critical illness might be worth consideration.

  • Critical illness cover if you have financial commitments
    Whether you rent your home or pay a monthly mortgage, you’re committed to paying it each month, and the consequences of not being able to do so wouldn't be insignificant. Even if you own your home outright, there are always bills to pay – which again, can’t normally be put off. Critical illness cover makes good sense in any of these cases. It can be used to make sure you don’t fall behind on payments or, worse still, lose your home in the wake of a diagnosis.
  • Critical illness cover if you have financial dependents
    Whether it’s a partner, children, or other family members, lots of us have financial dependents – which simply means other people who rely on our income to live safely and comfortably. If this is the case for you, critical illness cover could help to protect the lifestyle of your dependents in case a diagnosis meant you weren’t able to fend for them in the same way anymore, whether that’s on a temporary or longer-term basis.

Do I need critical illness cover?

When trying to work out whether or not you need critical illness cover, these are the kinds of questions you should ask yourself:

  • Could a serious diagnosis affect you financially?
  • Could you cope financially if you were unable to work for a while?
  • What ongoing financial commitments do you have?
  • Could you cut your expenses back a bit if you became unable to work?
  • Do you have savings you could use if you couldn’t work? And would you want to use them – or prefer not to?
  • Do you have a partner who could support you financially – and would you be happy to rely on them or prefer not to? Or, conversely, do you have a partner who relies on you financially?
  • Do you have any other financial dependents who also rely on your income?
  • Do you already have some illness cover through your employer? Is it sufficient for your needs? And what if you change jobs and lose that protection?
  • How would you react to a critical illness diagnosis? Would you want to take stock, reduce your working hours, or simply take some time off for yourself, or to spend with your family?

How much critical illness cover do I need?

Many factors determine the amount of cover you might need, including how much of a financial impact a critical diagnosis could have on you. It also depends on what kind of ongoing financial commitments you have and whether or not other people rely on you financially. Remember: your needs might change over time – so what you’d need tomorrow in the event of a diagnosis might not be the same as what you’d need in, say, 20 years’ time.

Will my children be covered by my critical illness cover?

Lots of critical illness policies do also cover your children, if you have them. This can be included at no extra cost – so your premiums won’t be affected by adding children’s cover. The children’s illnesses covered are either the same as the adult illnesses; or the same as the adult illnesses with some exclusions. Some policies will also cover child-specific illnesses, like Down’s syndrome or cystic fibrosis.

If your child is diagnosed with one of the serious illnesses covered by your policy, you’re usually only eligible to claim a proportion of your benefit amount. Typically, this is between 25% and 50% or £25,000 – whichever amount is lower. Making a claim like this doesn’t affect your main policy, so you’d still be able to claim the full amount for yourself, if you too were diagnosed with a covered illness. That said, there’s usually a limit to the number of additional children’s claims you can make.

Anorak takeaway

These are all the right things to be thinking about when exploring critical illness insurance – but if you take Anorak’s assessment, we’ll do all the heavy-lifting for you. Tell us about your life at the moment and we’ll work out what critical illness cover meets your needs and find the best-matched policies on the market for you right now. All in minutes.

Buying life insurance with critical illness cover

Life insurance and critical illness cover are two different kinds of insurance policies, but many insurers offer products that combine the two. This is why it’s fairly common for people to buy both at the same time – and why you might be considering it too.

What's the difference between critical illness and life insurance?

The difference is simple – critical illness insurance pays out if you’re diagnosed with a specified critical illness or condition; life insurance pays out if you die. Both pay a lump sum, but because of the nature of the policies: critical illness is paid to you, while life insurance is usually paid to your partner or family (or whoever you’ve named a beneficiary).

Can I take out critical illness cover separately to life insurance?

By all means, you can take these two kinds of insurance policies out separately. That said, many insurers offer combined critical illness and life products – and it can work out easier, from a life admin point of view, to have both kinds of risks covered with one product. Combined products can sometimes come with better benefits, too.

What's the difference between standalone and combined critical illness?

Standalone critical illness is its own insurance policy that only pays out on critical illness diagnosis. The alternative to this is what’s known as combined critical illness cover – which combines critical illness cover with life insurance, so it pays out on critical illness diagnosis or death (whichever happens first).

Anorak takeaway

We always recommend you buy critical illness cover alongside life insurance – to ensure you’re protected in case either scenario happens to you. But since you can only claim the main benefit once on a combined critical illness policy, we usually recommend covering some of your needs with a separate life insurance policy too. This is so you’d still have life cover even if you needed to claim for a critical illness beforehand.

How to find the best critical illness cover

When it comes to critical illness cover, the policy features tend to be the same across the board, regardless of insurer (which can make the policies tricky to compare). This includes the option to add children’s cover to your policy. We’ve laid out these features in the table below (but you can also read our guide to the best UK critical illness insurance companies for more guidance).

Typical critical illness policy features What they actually mean
Core benefit The core benefit pays out for the main illnesses or conditions listed in your policy. This benefit pays out the full amount of cover – so, if you had £50,000 worth of critical illness cover, that’s how much you’d receive on diagnosis of the illness or condition.
Additional benefit An additional benefit pays out for added illnesses or conditions (usually less severe) listed in your policy. This pays out a proportion of your benefit amount – normally 25% or £25,000, whichever is lower. So, if you had £50,000 worth of critical illness cover, you’d receive £12,500 for an additional benefit claim.

This benefit doesn’t affect your core benefit; you could still claim the full amount if you were later diagnosed with one of the core critical illnesses in your policy. You can also usually make multiple additional benefit claims (so long as it’s not for the same thing).
Child benefit Critical illness child benefit pays out if your child is diagnosed with one of the children’s illnesses or conditions listed in your policy (which can mirror the adult illnesses or be child-specific). This pays out a proportion of your benefit amount – normally 50% or £25,000, whichever is lower. So, if you had £50,000 worth of critical illness cover, you’d receive £25,000 for a child benefit claim.

Again, child benefit doesn’t affect your core benefit; you could still claim the full amount if you were later diagnosed with one of the adult critical illnesses in your policy. And again, you can make multiple child benefit claims, though the rules around this will vary from insurer to insurer.

It’s also worth noting while some insurers offer one critical illness policy, others offer ‘standard’ and ‘upgraded’ versions. The main way to differentiate between any of these is by the number illnesses and conditions covered.

Standard (adult) Upgraded (adult) Standard (child) Upgraded (child)
Aviva critical illness cover 39 core benefit illnesses

2 additional benefit illnesses
55 core benefit illnesses

42 additional benefit illnesses
38 core benefit illnesses

2 additional benefit illnesses
44 core benefit illnesses

3 additional benefit illnesses

9 child-specific illnesses
LV= critical illness cover 39 core benefit illnesses

2 additional benefit illnesses
59 core benefit illnesses

48 additional benefit illnesses
38 core benefit illnesses

3 additional benefit illnesses
58 core benefit illnesses

48 additional benefit illnesses

8 child-specific illnesses
Legal & General critical illness cover 47 core benefit illnesses

20 additional benefit illnesses
45 core benefit illnesses

19 additional benefit illnesses
Scottish Widows critical illness cover 47 core benefit illnesses

29 additional benefit illnesses
46 core benefit illnesses

5 child-specific illnesses
Zurich critical illness cover 46 core benefit illnesses

2 additional benefit illnesses
58 core benefit illnesses

57 additional benefit illnesses
45 core benefit illnesses

2 additional benefit illnesses
57 core benefit illnesses

56 additional benefit illnesses

6 child-specific illnesses

N.b. Data true as of 6 January 2020.

Anorak takeaway

The way insurers categorise illnesses and conditions isn’t always consistent. At Anorak, we’ve built a different way, so it’s easier to make a genuine comparison between insurers and products. That’s why the numbers you see here might be different elsewhere – even when you’re looking at an insurer’s own website.

What's 'terminal illness benefit' – and is it the same as critical illness cover?

Some insurers include what’s known as ‘terminal illness benefit’ in their life insurance policies. This means the life insurance lump sum would be paid out early if you’re diagnosed with a terminal illness – i.e. a doctor says you only have a certain amount of time left to live. For most insurers, this amount of time is 12 months or fewer. Terminal illness benefit is not the same as critical illness cover – it’s simply a feature of a life insurance policy. Critical illness cover, on the other hand, is its own insurance policy, which pays out on diagnosis for included illnesses.

Will my critical illness cover premiums always stay the same?

So long as you make sure your policy is on a guaranteed premium basis then yes, your critical illness premiums will always stay the same (or go up at a guaranteed rate, in line with inflation), no matter how long your policy term is. This is a great feature to look out for when buying life insurance and income protection too – particularly as they’re long-term protection products, so you could be paying the premiums for many years, if not decades.

Critical illness cover: Anorak summary

Critical illness might not be as well-known an insurance product as something life insurance, for example, but it can be an extremely worthwhile kind of cover, particularly since people of working age are far more likely to suffer from a critical illness or condition than they are to die. What’s more, the financial consequences of a diagnosis can often be significant, especially as it'd more than likely leave you unable to work for a period of time. When you think of it like this, it’s easy to see how critical illness cover can provide substantial peace of mind, especially if you’re a breadwinner in your household.

It’s also worth remembering that critical illness cover pays out as a one-time, tax-free lump sum. This means it has the flexibility to be used however you need. You could use it to help keep up with the cost of life if you’re unable to work, or to keep supporting you and your dependents. It could give you the financial cushion needed to take time off to recover – or to make household alterations (if your illness or condition requires them).

Ultimately, the lump sum paid out by critical illness cover if you get a serious illness or condition can make all the difference in how well you’re able to cope with that diagnosis – simply by providing financial relief.

This guide is intended for informative purposes only and does not constitute advice.