Critical illness cover

If you’ve decided that you want to offer your loved ones some financial security in the case of your death, then life insurance is something that you may well be looking into. But what would happen if you were living with a condition and unable to support your family because you could no longer work? Critical illness cover could offer you an enhanced level of security. Read our guide to find out what critical illness cover is, what it might cover and how much it could cost.

What is critical illness cover?

A life insurance policy will usually provide a lump-sum payment when the policyholder dies. Critical illness cover, on the other hand, can provide a lump-sum payment if the policyholder is diagnosed with a condition, often life-changing, that is defined as a critical illness by the insurer.

You can get critical illness cover in two ways:

• Cover that can be added to a life insurance policy. If you choose to add critical illness cover to your life insurance, you and your loved ones will generally get a lump-sum payout if you have a critical illness and also when you die.
• Cover that can be combined with a life insurance policy. If you choose to combine critical illness cover with your life insurance, you will generally only receive one lump-sum payout either when you have a critical illness or when you die.

What does critical illness cover?

An insurer will generally have a list of conditions that it defines as a critical illness, such as a heart attack, cancer or a stroke.

Some of the more comprehensive policies may list up to 50 illnesses, including common conditions such as Alzheimer’s or deafness. What is defined as a critical illness may differ from insurer to insurer, so always check what is included on the list and what conditions might be excluded.

Each insurer will have its own list of defined critical illnesses, so it’s always best to shop around to see what conditions are included in the critical illness list.

What is not covered?

Even though one insurer may list a condition as a critical illness, another insurer may exclude it from their critical illness list, so it’s always best to check the list before committing. For example, some insurers may list up to 50 or more conditions within their critical illness list while other insurers may limit their list to core critical conditions.

How much critical illness cover do I need?

How much cover you will need really depends on your own circumstances. What might be suitable for you might not be suitable for another person. Think about the level of cover you require instead of focusing on price since selecting the cheapest deal might not offer you the best cover.

How do I make a claim on my critical illness cover?

You should contact your insurer as soon as you get a diagnosis. Your insurer will be able to tell you whether your particular diagnosis is covered under your critical illness cover. If it is covered, you can begin the claim process. This will differ slightly depending on your insurer, but the exact process will be made clear to you after contacting your insurer. The contact details will usually be contained within your policy document.

The insurer will then need to access your medical records in order to gather information regarding your illness or condition as well as information regarding the severity of it. Based on this information, and after verifying all your information relating to the policy, the insurer will then process your claim and make a payout to you. Once you receive the payout, your policy will come to an end.

If, on the other hand, your diagnosis is not covered by your critical illness cover, you will not be able to make a claim. Your policy will remain in place until you make a future claim or your policy term ends, whichever comes first. However, your insurer will update your records with your new diagnosis. It is then unlikely that you will be able to make a future claim if any illness relates to this diagnosis.

How to find the best critical illness cover

Finding the best critical illness cover will very much depend on your own circumstances. It’s worth doing your research and finding out which conditions are listed as a critical illness. The more comprehensive the list of critical illnesses, the more the premiums are likely to be for the cover. You will need to decide which critical illness cover is right for you.

Frequently asked questions

• When does critical illness cover make a payout?

  A critical illness policy will only make a payout when your diagnosis is covered under your policy and your claim is successful. Once a payout has been made, your policy will naturally end.

• Can my doctor diagnose an illness or will I need to be diagnosed by one of my insurer's approved doctors?

  Typically, a diagnosis from your own doctor will be sufficient, although your medical records will need to be shared with your insurer and then verified. It is unlikely that your insurer will need to send one of its own approved doctors out to see you. To avoid any problems with a claim, it is best to check this detail with your insurer after receiving a diagnosis from your own doctor.

• Will I get the critical illness cover payout if I can still work?

  This really depends on the severity of your diagnosis. If your diagnosis is covered by your critical illness cover, your claim is successful and a payout is received, then it is entirely up to you whether you choose to return to work afterwards. But even though your condition might be covered under your policy, the insurer will need to look into how bad your condition is as well as any lasting damage that might have been caused, and make a decision about whether to make a payout based on this information.

• How much does critical illness cover cost?

  The cost of critical illness cover will vary depending on the level of cover you choose as well as on the insurer offering you the cover. Your premiums will also be calculated based on a number of personal factors, such as your age, occupation, medical history, current health and lifestyle.

  It’s important to understand that your premiums are likely to be cheaper if you are young and healthy. Meanwhile, lifestyle choices such as smoking or drinking alcohol regularly could mean that your premiums are higher.

• Can I get critical illness cover for my children?

  Some insurers may give you the option of adding critical illness cover for any of your children. This could mean that your premiums rise, but if one of your children develops a critical illness as defined by the insurer, then the insurer would make a lump-sum payment.

• What is terminal illness benefit?

  A life insurance policy will usually pay out a lump sum when the policyholder dies. A terminal illness benefit, on the other hand, can pay out the lump sum if the policyholder is diagnosed with a terminal illness and given less than one year to live by a consultant or medical officer.

  It might often be included in a life insurance policy as a standard policy feature where the policy term lasts longer than two or more years.

• What is the difference between terminal illness and critical illness?

  Terminal illness and critical illness can both refer to extremely serious medical conditions. The main difference between them is that a consultant will usually expect a terminal illness to bring about the death of an individual within 12 months. A critical illness could be an isolated serious illness, injury or medical episode that an individual is expected to recover from.