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  • Chris Warner

Protection - Critical/Serious Illness cover

Updated: Sep 3, 2021

Critical/Serious Illness Cover- In brief: A tax-free lump sum payment (although can also be a monthly benefit) paid to you if you contract a specific illness from a defined list confirmed at the outset by the insurer.


Critical illness insurance was originally created in the early 1980’s to provide protection against the 4 main critical illnesses of the time; Cancer, Stroke, Heart Attack and Coronary bypass surgery. At the time 3 in 4 cases of cancer* and 7 in 10 heart attacks** were fatal. Nowadays with advances in modern medicine and treatments most cancers are survivable with approx. 50% of adults surviving for at least 10 years* and now 7 in 10 heart attacks** are survivable. [sources needed from Vitality slides].


That being said, today you are much more likely to suffer from a critical illness than die during your mortgage term. The latest statistic that 1 in 2 of us will be diagnosed with cancer in our lifetime, is a reminder of how important this type of cover can be.


Critical/Serious Illness cover can be set up to provide a lump sum benefit over a defined term. Many policies are set up alongside life cover to match the mortgage balance and term, for example, on a decreasing term basis to provide cover for a capital repayment mortgage; so that by the end of the term your policy will lapse, but there is no longer a mortgage that would need to be repaid. As previously covered in our life insurance blog, policies can have many different variables and value-added benefits depending on the provider selected.

Critical/Serious illness cover may also be used to provide a lump sum, or monthly benefit to cover lifestyle costs that are outside of the need to repay a mortgage. For example, costs required to make changes within your home, or those that may come as a result of a reduced ability to work or need to look after your family.


Although many polices are taken alongside a mortgage, with the view of repaying the balance, in the event of a claim the lump sum (or monthly payment) is provided to you, and you can choose to use it for whatever purpose is required at the time, providing an element of flexibility in the financial assistance that this type of cover can provide. Some providers will also provide a nominal pay out to clients, depending on severity, for initial diagnosis of certain illnesses or conditions including a range of conditions that would not typically be covered by “normal” critical illness cover. You can even, with some policies and providers, claim more than once on the same policy until you have used all the cover provided.


What is a Critical Illness?

The kinds of illnesses that are covered are usually long-term and very serious conditions such as a heart attack or stroke, loss of arms or legs, or diseases like cancer, multiple sclerosis, or Parkinson's disease. In addition to the main critical illnesses covered, some providers can also pay out a portion of the cover if you are diagnosed with a less severe condition, i.e. less severe cases of breast cancers.


Additional benefits such as Children’s critical illness cover can also be included by some providers, which can be a useful addition to cover taken, and is sometimes even free of charge.

If you wish to explore the peace of mind that having critical illness could provide you and your family, then please get in touch to see how we can help



Sources: * Cancer Research UK, accessed 2019 ** BBC, 2019

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