Critical Illness Cover UK
What is Critical Illness Cover in the UK?
Critical illness cover in the UK is a type of life insurance policy that offers protection in the event of a serious illness or injury.
If your insurance policy covers the condition you’ve been diagnosed with, you’ll often get a one-time, tax-free reimbursement. This can reduce any financial worries that might arise from the shift in your life and support it. It might be as easy as paying off your mortgage, making up for any lost wages, or possibly making the necessary house improvements. The money from your policy will lessen the financial strain placed on your family if you have dependents living at home.
According to statistics, we have a higher chance of suffering from a critical illness than passing away during our working lifetimes. Without enough cover protection, your loved ones can experience serious financial hardship because of the loss of income brought on by a critical illness.
If you are given a diagnosis of a specific life-altering (but non-terminal) condition covered by your policy, critical illness cover (or critical illness insurance) will pay you a lump payment.
- Could you make mortgage payments going forward?
- Could you support the current standard of living for your family?
- Have you saved enough money to transition to a new way of life?
The money received from a critical illness pay-out is tax-free and may be used any way you see fit, including:
- Personalised medical care.
- Adaptations you must make to your home.
- Providing financial support if you are no longer able to work.
- Taking pleasure in family activities, like holidays.
How Does Critical Illness Cover Work in the UK?
FAMILIES PROTECTED
You will be covered if you are hurt or are found to have a condition that is covered by your critical illness policy if you make your premium payments on time (this might be monthly or annually). Once you’ve been diagnosed, you’ll often get a one-time, tax-free payout that you can use to either make up for the income you missed while taking time off work, pay for medical expenses, or make the house improvements that are required.
You can combine your security in one policy by adding critical illness cover as an add-on to your life insurance policy in the UK. To safeguard your loved ones, certain policies might also include coverage for families with kids.
Make sure to thoroughly read the policy wording because there could be a postponed period that prevents you from receiving your compensation right away after diagnosis. Before submitting your claim, you might have to wait for a predetermined amount of time.
Do You Need Critical Illness Cover in the UK?
Although the government does provide benefits for sick leave, they typically only amount to £96.35 a week. This could not be enough to supplement your income or aid in your adjustment to your new situation.
In August 2022, Zurich research found that more than half of cancer patients said their financial situation had been influenced to a “major” or “severe” extent. For instance, the average monthly rise in expenses was £541. The annual cost is £6,492.
If you are forced to quit your job, the sudden increase in expenses will only get worse. The same study found that 26% of respondents had to entirely quit working, and a further 32% had to switch to part-time work. This indicates that while their outgoings significantly increased, more than half of them lost all or part of their income.
Critical illness cover in the UK comes into play here. A critical illness insurance policy in the UK could help you financially and cover expenditures like a mortgage or rent, regular living expenses, and loved ones who are reliant on you if you don’t have enough in savings to cover a lengthy period of illness or disability.
In the end, you decide whether to obtain critical illness coverage in the UK or not. If you decide to purchase self-insurance, it’s critical to locate the plan that best suits your needs and to understand the scope of your coverage. Although general income protection insurance in the UK is probably more expensive than critical illness cover in the UK, income protection insurance is still an alternative, so it’s important to weigh up all your possibilities.
What Conditions Does Critical Illness Cover in the UK?
Depending on the specifics of the life insurance that you purchase, what is covered by critical illness insurance in the UK will vary.
Critical illness cover in the UK varies slightly between providers, and the severity of the condition can affect whether you’re covered, but conditions may include:
- Heart attacks
- Strokes
- Non-terminal cancer
- Multiple sclerosis (MS)
- Parkinson’s
- Organ transplants
- Severe head injuries
Critical illness cover in the UK can also cover you if you’ve suffered a physical disability following an injury, such as after a serious accident at work.
How Much Does Critical Illness Cover in the UK Cost & How Much Cover Do You Need?
The amount that your critical illness cover in the UK will cost depends on:
- The amount of cover you’re looking for
- Your age
- Your health and lifestyle (including smoking and alcohol consumption)
- Any pre-existing medical conditions you have
- Your current personal circumstances
- How long you want the policy to be in place for (the term)
It can be quick to add critical illness cover on to a life insurance policy quote in the UK.
Consider once more the expenses you’d have to pay if you became sick and couldn’t work (this might include regular outgoings, such as energy bills and food shopping).
If you have children, you should make sure that they are taken care of in case your health prevents you from working. Financial security for you and your loved ones may be provided through level cover.
The ability to repay your mortgage may also require a policy, which is frequently a prerequisite of mortgage applications. Reduced coverage aids in the repayment of debt, such as a mortgage with a reduced payment schedule.
You may typically get life insurance and critical illness insurance in the UK together for further security. By doing so, you’ll be covered from a variety of threats and have the flexibility to decide how much insurance coverage you require for each policy.
How Long Does Critical Illness Cover Last in the UK?
Like term-based life insurance, critical illness cover in the UK provides you with coverage for a predetermined amount of time. Your needs for protection have an impact on this period, which is decided throughout the application procedure.
In general, the more critical illness coverage you need in the UK, the more you’ll pay because your odds of filing a claim throughout the policy period rise.
When purchasing critical illness cover in the UK, you should consider how long your mortgage will be outstanding as well as how long other people will likely depend on you.
Your need for critical illness cover in the UK will be determined in part by the answers to these questions.
Finally, most critical illness plans in the UK have an upper age restriction beyond which they will give coverage; this age range is often between 70 and 84. As a result, you won’t be able to get a term that extends over the provider’s maximum age, as at that point the critical illness insurance in the UK must end.
Is Critical Illness Cover Worth It in the UK?
The value of critical illness cover in the UK will depend on your specific situation.
It is crucial to keep in mind:
- Whether the loss of money if you were unable to work would have an impact on your way of life.
- Do you have any money you could fall back on if you were to make repairs to your house and pay for carers (if necessary)?
- Whether you have the necessary funds to cover the monthly premiums.
Having critical illness cover in the UK in place is very likely to be worthwhile if your lifestyle is going to be affected and/or you do not have enough money to meet the change in lifestyle that a serious illness would bring.
Life Insurance vs Critical Illness Cover in the UK
Nowadays, critical illness coverage can be added to most life insurance policies in the UK.
Your premium will go up as a result, but if you are diagnosed with a critical illness, you will still be paid. While having this additional layer of insurance can help you retain your current way of life, it does mean that your coverage will end if you are given a serious medical diagnosis.
Your loved ones won’t get a bigger pay-out when you pass away as a result.
You’ll have two levels of insurance protection if you take out separate critical illness and life insurance plans in the UK, provided your budget allows (and possibly two pay outs).
Income Protection vs Critical Illness Cover in the UK
Since both critical illness and income protection insurance in the UK are designed to pay you if you are unable to work, they are frequently mistaken.
The two are not equivalent, though.
If you are diagnosed with a life-threatening disease and unable to work, critical illness cover in the UK provides a one-time tax-free payment.
In contrast, income protection insurance in the UK makes regular payments that are equal to a portion of your salary to assist you to make up for the income you lose while you’re unemployed.
A larger range of situations—including severe illness, minor illness, accidents, and stress—often result in income protection payouts in the UK.
Conversely, critical illness cover in the UK does not need you to miss work to file a claim and only pays out in the event of a life-changing disease.
Income protection insurance in the UK is typically far more expensive than critical illness cover, a much more involved product, and the level of coverage can vary greatly between insurers.
Compare the Best Critical Illness Cover in the UK
Age, family medical history, if you smoke, your profession or hobbies, and many other variables can influence the price of critical illness cover in the UK. As a general guideline, never choose a critical illness insurance policy issued to you by your bank or directly with an insurer if you have determined that critical illness cover is the appropriate choice for you. Doing so can be the most expensive option.
Use Life Expert instead, who specialises in finding you the best and most suitable critical illness cover in the UK based on your personal circumstances and budget. We will use our panel of insurers to find you the most suitable critical illness insurance policy within your budget.
Critical illness cover in the UK is typically available as an add-on to your life insurance policy. It is typically less expensive to combine your critical illness cover with a life insurance policy, and with Life Expert, getting the most suitable critical illness policy based on your personal circumstances couldn’t be easier with our advised service.