What is critical illness cover?

Critical illness cover is a type of insurance that pays out a lump sum if you're diagnosed with a serious medical condition listed in your policy. It’s there to support you financially at a time when your health – and possibly your ability to work – takes a hit.

It’s often added to a life insurance policy as an optional extra, but it can also be taken out as standalone cover. Either way, it’s designed to help you cope with the financial impact of becoming seriously ill.

You can use the payout however you need. That could mean covering your mortgage, paying for private treatment, or keeping the household running while you recover.

Why choose critical illness insurance?

If you were suddenly unable to work because of something like cancer, a heart attack or a stroke, how would you and your family cope? That’s where this type of cover comes in, giving you a buffer when you need it most.

Being diagnosed with a serious illness can be life-changing – emotionally, physically, and financially. Critical illness cover helps soften the financial blow, so you can focus on your health instead of worrying about bills.

The money could be of huge help to replace lost income to ensure you can keep paying your existing bills. But it may also be a lifeline to pay for things such as adapting your house or buying special equipment to help you live with your condition.

You may want to consider critical illness cover if:

  • You don’t have enough savings to fall back on.

  • Your employer’s sick pay wouldn’t last long.

  • You’re self-employed with no sick pay in place.

  • Your family relies on your income.

  • You want financial breathing space while you recover.

What happens when a critical illness policy pays out?

You have some options when choosing the type of critical illness cover you take out, so let’s get down to how it works. The first thing to understand is the difference between combined and standalone policies:

  • Combined policies: When you include critical illness cover on your life insurance policy, the policy typically pays out just once - for either death or illness. After paying out for the critical illness, the policy closes and you have no life cover in place.

  • Standalone critical illness cover: If you take out separate critical illness and life insurance policies, after your critical illness plan pays out, your life policy will still continue to provide cover.

If you take out a joint critical illness policy, you can choose between two further options:

  • Standard joint critical illness cover: This type of policy pays once. If one of you makes a claim, the policy ends and there is no cover in place for the other person.

  • Dual critical illness cover: These policies continue after the first claim, so the other person will still be covered.

What does critical illness insurance cover?

Typically covered

The number and type of illnesses covered varies between insurers, but policies will typically include some of the most common serious conditions, such as:

  • Cancer - certain types and stages.

  • Heart attack.

  • Stroke.

  • Multiple sclerosis.

  • Major organ transplant.

  • Parkinson’s disease.

  • Alzheimer’s.

  • Permanent disability from injury.

Some policies may also cover less common illnesses, or offer partial payouts for conditions that aren’t life-threatening but still serious.

Always check the policy details carefully. Each provider has its own list of covered conditions, and specific criteria will often need to be met for a successful claim.

What isn’t covered?

While critical illness cover offers valuable protection, there are situations where a claim may not be paid. Depending on the insurer and policy, these may include:

  • Pre-existing conditions: If you’ve had the illness or symptoms prior to applying, the condition will typically be excluded.

  • Less serious conditions: Some conditions are excluded, and some aren’t covered unless they meet a specific level of severity.

  • Non-disclosure: If you don’t tell the truth on your application, your claim may be denied.

  • Missed payments: If you stop paying your premiums, your cover could end.

  • Fraud or non-disclosure: If you aren’t honest and accurate when applying, the insurer could refuse to pay out.

  • Outliving your policy: Once you reach the policy term, the cover ends and there’s no payout.

Please see each policy’s exclusions and limitations: always read the small print to make sure you understand the terms and conditions.

How much does critical illness cover cost?

Your critical illness cover premium will depend on factors like:

  • Your age: The younger you are when you take out a policy, the cheaper your premiums will usually be.

  • Your health: Existing health conditions typically mean premiums are higher.

  • Your lifestyle: Lifestyle choices such as smoking can push premiums up.

  • Length of term: A longer policy term often means higher premiums.

  • Your occupation: Some occupations make life insurance and critical illness cover more expensive.

  • The ‘sum assured’: A policy that pays out £250,000 will cost more than one for £100,000.

  • Standalone or with life insurance: It may be cheaper to add critical illness cover to a life insurance policy than to take it out as a separate product.

  • The number of illnesses covered: The more extensive the list, the more expensive it can be.

  • Level or decreasing cover: Policies with a decreasing sum assured (often used with mortgages) may be cheaper than policies where cover remains at the same level.

  • Reviewable or guaranteed premiums: Reviewable premiums typically start lower, but can rise when your payments are reviewed. Guaranteed premiums typically start off higher, but remain the same.

You may find your own quotes come in cheaper or more expensive than average premiums. The best way to find out how much cover would cost for you is to compare quotes from leading insurance companies.

How to keep costs down

There are ways that you may be able to make critical illness cover more affordable:

  • Start as early as you can: The younger you are when you take out a policy, the lower your premiums are likely to be.

  • Choose the right level of cover: Look at your wider financial situation, such as any savings, property or investments, and choose a level of benefit that makes up the shortfall without buying unnecessary cover.

  • Be healthy: Insurers typically offer lower premiums to people who maintain a healthy lifestyle. Stopping smoking, eating well and managing any chronic health conditions may trim pounds off your premiums.

  • Consider a joint policy: A joint policy is often cheaper than taking out two separate policies – but with some policies coverage ends after the first payout.

  • Review your cover: If your life circumstances change you might not need as much cover. You may be able to amend your policy, or cancel it and take out a cheaper one.

  • Shop around and compare quotes: Each insurer has its own pricing model, so it’s essential to compare quotes before committing to a policy. Don’t settle for the first quote you receive; it’s always worth exploring your options.

By making a few smart choices, you can reduce your premiums without compromising on the protection you need.

Things to consider

Critical illness cover can offer real peace of mind. But it’s important to understand how it works and what to watch out for, so you can choose the right cover with confidence:

It only pays out once per person

If you claim for a critical illness, you won’t normally be able to claim for future conditions. If your critical illness cover is wrapped up within a life insurance policy, your life cover will also come to an end.

Not all illnesses are covered

Each provider has a different list of what’s included, and across all providers the focus is on covering just serious life-altering illnesses.

Keep up your payments

If you miss a premium payment, your cover could stop. Some policies offer a grace period, but if premiums aren’t paid, the insurer might cancel the policy or refuse a payout.

Be honest in your application

Insurers can decline claims if key details were incorrect or left out when you applied.

If you’re unsure about whether critical illness cover is right for you, seeking advice from a qualified financial adviser can help ensure you’re making the right decision.

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Page updated on 9th October 2025, Reviewed by Richard Groom