Critical illness cover is a type of life insurance policy that offers protection in the event of a serious illness or injury. If you’re diagnosed with an illness that your policy defines and recognises as critical, you’ll be eligible to make a claim, and once approved, receive a one-off payment. This can help with practical support, such as making any necessary modifications for your home to cater for your new condition, or simply ease the financial burden of paying off any existing debts to reduce the stress on you and your loved ones.

Is critical illness cover different to life insurance?

A simple question to start with. Yes, critical illness is different to life insurance in terms of content and coverage. Some life insurance providers may include critical illness cover within their life insurance policies as standard, while others choose to offer it as an optional policy add-on. If your prime interest is critical illness cover, this is readily available as a separate policy.

So, are all critical illness policies the same from all insurers?

Again, a simple answer, no. Whilst the market may have some typical approaches to this type of cover, definitions of what constitutes a critical illness tends to vary from provider to provider. For this reason, it’s really important to know what is and isn’t covered by the policy and it’s probable that your policy will have different levels of benefit depending on the type of condition you’re diagnosed with.

The extent of policy coverage offered by an insurer will depend on a number of personal factors and circumstances, such as your medical history, pre-existing medical conditions, and lifestyle choices.

The basis of any claims settlement will also vary according to the type of policy you have. Life insurance with separate critical illness cover will make a payment upon diagnosis of a critical illness and again if you pass away during the time your policy runs for. With a combined policy, you’ll only receive one payment, either on diagnosis with or death from a critical illness.

What is the length of cover under a critical illness policy?

Critical illness products fall within the family of insurance known as term assurance or term life. These policies run for as long as the period, or term, you decide to take out, known as a term life policy. Many choose to set up their policy to run for the same length of time as a major financial commitment, such as home or auto loan: others calculate the cover term based on how long their dependants will rely on them for financial support, should they, as the provider, become ill.

Can the policy cover be adjusted?

Most critical illness insurance providers allow changes to be made to the policy: whether this be extending the term, or increasing the level of cover. It’s advisable to check if you can adjust your policy before purchasing it and committing to any cover starting.

Is it possible to cover my spouse or partner under the same policy?

The only real way to do this is to take out a joint life insurance policy, which includes critical illness cover to be added on. You should note, however, that you’ll only be able to claim for critical illness once under this policy: meaning that if either one of you makes a claim, the critical illness cover for the other ceases upon claim settlement. If you want to ensure full protection for you both, it’s best to take out separate policies in your individual names.

And what about my children? Can I get critical illness cover for them?

The good news is yes, you can get critical illness cover for children, but typically this is not a standalone product purchased in their own right and in their own names. Cover should be bought as an extension to your policy as their parent or guardian and you should note that if you need to make a claim in respect of your child under the policy, you must do this as the primary policyholder.

Is there a right time to buy critical illness insurance?

The right time for you to buy is down to your personal preference and circumstances, but we can say that “life events” are often trigger times for many to take out the cover they decide they need. These may include, but not limited to:

  • A home purchase – having critical illness insurance to run in parallel with your home loan will provide peace of mind protection against not being able to keep up with the monthly repayments should you fall critically ill and are unable to work whilst the loan is still in force. Depending on the level of cover you’ve selected, and subject to approval of your claim, the one-off settlement could potentially pay off the balance of your loan entirely exactly when you need help the most.
  • Marriage to your partner and/or the birth of a child – events such as these may result in you becoming responsible for the financial security of others and as the breadwinner, if you were to fall critically ill or suffer a serious disability named under the policy, critical illness cover could help support your family and lessen their stress as well as yours.
  • Relocating or securing a new job – embarking on an expatriation or getting a new job can be exciting but can be a worry if your new country or employer doesn’t have a benefits package that offers suitable sick pay, or income protection insurance. You can replace your remuneration lost by the benefits offered under a critical illness policy.

About Author

Rachel Al Mughairi

About Author

With over 34 years in the international insurance industry in a variety of senior management roles, and as holder of the Diploma in Insurance from the Chartered Insurance Institute, Rachel surely knows her insurance! With experience in London, continental Europe and the Middle East, Rachel is here to share her knowledge and help you understand more about insurance products in this easy-to-understand series of videos and blogs.