Critical Illness Insurance

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Critical Illness Insurance

Critical Illness Insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating (but not fatal) conditions including heart attack, stroke, cancer and major organ transplants.

This list will vary depending on the insurer, as will the exclusions for making a claim.

Critical Illness Insurance often comes as an optional addition to a Life Insurance policy, but can also be purchased on its own.

Policies usually only pay out once, so they don’t necessarily replace your regular income, but you can use the money towards medical treatment, your mortgage or anything else you choose.

Many people buy Critical Illness Insurance when they take on a major commitment, like a mortgage, or start a family. However, since we’d all like to have our financial commitments lightened if we were to suffer a serious illness or injury, the cover is relevant for most of us at any time.

If you already have Critical Illness Insurance you should think carefully before you cancel your existing policy and take out a new one.

For example, if you’ve developed any illnesses since you first took out the policy, you may lose some of the benefits when you replace it. That’s because pre-existing medical conditions may not be covered by the new policy.


This article (Critical Illness Insurance) is intended to provide a general appreciation of the topic and it is not advice.

Article expiry: 05 Apr 2021

Critical Illness Insurance - What you need to know

What is Critical Illness Cover? 

Critical illness cover is a type of insurance policy that will pay out a lump sum if you are diagnosed with one of the specific medical conditions set out in the policy. 

You should be aware that not all conditions are covered by a critical illness insurance policy and the severity of the illness is also relevant to whether you will receive a payment. 

Although they are sometimes sold together, critical illness cover is not the same thing as life cover and the two should not be confused. 

What does Critical Illness Insurance not Cover? 

Your critical illness insurance policy may only provide you with protection once your illness reaches a specific level of severity. 

Not all cancers are included, and your symptoms may need to be permanent for you to be able to make a claim for other illnesses. 

It is essential that you read through all of the policy documents thoroughly so that you have a clear idea of what is covered and what isn’t. 

Do I need Critical Illness Insurance? 

To decide whether you need critical illness insurance you should first check the following: 

  • That you don’t already have critical illness insurance as part of another insurance policy such as life insurance or as part of your mortgage
  • Whether or not you have insurance that could be used instead of taking out insurance 
  • Whether your employer will pay out any benefits if you can’t work due to ill-health or disability 

What are the 26 Critical Illnesses? 

There are 26 illnesses that are eligible for full-benefit payout, these include: 

  • Acquired brain injury
  • Aortic surgery
  • Aplasic anemia
  • Benign brain tumour
  • Bacterial meningitis
  • Blindness
  • Cancer
  • Coma
  • Coronary artery bypass surgery
  • Deafness
  • Dementia, including Alzheimer’s disease
  • Heart attack
  • Heart valve replacement or repair
  • Kidney failure
  • Loss of independent existence (LOIE)
  • Loss of limbs
  • Loss of speech
  • Major organ transplant
  • Major organ failure on waiting list
  • Motor neuron disease
  • Multiple sclerosis
  • Occupational HIV infection
  • Paralysis
  • Parkinson’s disease and specified atypical parkinsonian disorders
  • Severe burns
  • Strokes

How much does Critical Illness Insurance Cost? 

When applying for critical illness insurance you will need to provide information about your medical history to work out what your premiums would be. 

If you are in good health and have no pre-existing conditions, this will be easy to work out. 

The final amount that you will pay for your critical illness insurance will depend on a range of factors. These include your age, your current health, your lifestyle, and the level of insurance cover that you need to take out. 

What do you need to think about before you take out Critical Illness Insurance?

Before you take out this type of  insurance, you should first check to ensure that you don’t already have cover in another policy. 

You should check that critical illness insurance is the best type of insurance for you. Income protection insurance may cover a greater range of illnesses.