A Guide to Critical Life Insurance (Critical Illness Cover)

An elderly man in a hospital bed

August 31, 2021

Protecting yourself and your loved ones encompasses a whole manner of things, including ensuring that you’ve got a suitable life insurance policy in place to protect both you and your family in the event of something happening to you.

While you might already have a standard life insurance policy, you might also want to think about getting a life insurance add-on such as critical illness cover. This additional cover can be part of a combined policy where you have all your life insurance cover under one policy, giving you peace of mind that you and your family are protected.

In our guide to critical life insurance, we talk about what critical illnesses are covered in a critical illness life insurance policy, as well as the pros and cons of critical life insurance and we discuss is it worth getting critical life insurance.

What is covered by critical illness cover?

Critical illness cover is a type of life insurance policy that offers protection in the event of an emergency, such as a serious injury or illness.

What this type of policy covers depends on the type of life insurance you take out and the level of critical illness cover you want. It also depends on the severity of the condition, but in many cases, you can get critical illness cover for the following:

  • Heart attacks 
  • Multiple sclerosis (MS) 
  • Strokes 
  • Parkinson’s 
  • Organ transplants 
  • Non-terminal cancer
  • Severe head injuries
  • Physical disability as a result of a serious injury

Note: It is very important to understand the terms and conditions of your life insurance policy - your critical illness insurance may only cover you for certain severities of the above illnesses, so just make sure you are fully aware of your inclusions and exclusions.

What does critical illness insurance not cover you for?

The exclusions of critical illness insurance differ between providers, but most policies won’t cover terminal illnesses of less than 12 months.

If you have a terminal illness and you want to get cover, you will have to take out regular life insurance.

How does critical life insurance work?

Critical life insurance works like most other types of insurance policies in that you’ll pay for your cover on a monthly or annual basis.

You will then be covered if you get injured or become ill with an illness that’s specified on your policy. Once you have a diagnosis, you will usually receive a one-time tax-free payment that can be used to pay for things like medical bills, to replace the income you’ve lost as a result of not being able to work or to make necessary changes to your home if you need to adjust it for your new condition.

Difference between critical illness cover and income protection

Critical illness cover and income protection are similar in the sense that they both provide you with financial support if you get an illness or get injured, but they differ in the way that you receive the payment.

Critical illness cover pays you in one lump sum if you’re diagnosed with or suffer from an injury that’s specified in your policy, whereas income protection provides you with a regular payment as a percentage of your salary if you’re unable to work during your period of illness or injury.

Read more: What is income protection insurance?

Advantages and disadvantages of critical life insurance

Before you think about taking out critical life insurance, it’s important to weigh up the pros and cons to ensure that you make the right decision for you.

Pros

  • The rate of payout is usually high.
  • You have the freedom to spend the money however you like.
  • You could potentially use the payout to invest.
  • You can sometimes take out cover for your children for free if you have to take time off work to look after them.

Cons

  • Your policy might not cover every injury or illness so you might not be able to get cover for the condition you have.
  • The price of your premiums for critical cover can vary enormously depending on the condition you want to get cover for as well as your own life circumstances.
  • Most providers will only pay out for one claim, so it’s limiting as to the amount of times you can make a claim.
  • Critical cover can be very expensive.

Can I get critical life insurance?

In order to qualify for critical life insurance, you will need to be aged 18 years or older and be a UK resident. With some policy providers, there is also an upper age limit in terms of taking out a policy, but this usually differs between providers. 

Is critical illness insurance necessary?

Critical illness cover isn’t something that everyone takes out as many people just have standard life insurance, but it might be something you want to think about getting if you want to ensure that you and your family are protected in the event of a serious illness or injury.

How much is critical life insurance?

The main factor that affects the cost of critical life insurance is age. Below, you can find a table with approximate costs for life insurance with and without critical cover for different ages.

Age
With Critical Illness Cover
Without Critical Illness Cover
20-24 £40.80 £14.33
25-29 £53.16 £17.66
30-34 £69.27 £24.15
35-39 £85.38 £29.90
40-44 £102.84 £35.30
45-49 £121.10 £39.14
50-54  £144.43 £45.39
55-59 £157.61 £54.48
60-64 £187.60 £67.29
65-69 £282.30 £75.47

What affects the cost of critical illness cover?

As well as age, there are several other factors that affect the cost of critical illness cover.

  • Your age 
  • Your health and lifestyle (such as whether you smoke and drink and how much)
  • The amount of cover you want to get 
  • If you have any pre-existing medical conditions 
  • Your current personal circumstances 
  • How long you want the critical illness policy to last

How to get the cheapest critical life insurance deal

Compare quotes from different providers.

  • Think about the level of cover you want to get and how much you’re willing to pay.
  • Consider the types of injuries or illnesses you want to be covered under your policy.
  • Always be honest about your lifestyle and existing conditions when applying for cover.

Get a quote today

Get a free, no-obligation quote for life insurance or critical illness cover now with Bobatoo:

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