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What is critical illness cover?

Critical illness cover is an insurance policy that pays a tax-free lump sum if you are diagnosed with one of a specified list of serious medical conditions. Unlike income protection, which pays a monthly income, critical illness cover provides a single payment, typically used to clear a mortgage, fund private treatment, or replace savings depleted during recovery.

What conditions does critical illness cover pay out for?

Most UK critical illness policies cover a core set of conditions including all major cancers (at a specified severity), heart attack, stroke, multiple sclerosis, Parkinson's disease, kidney failure, and organ transplant. Comprehensive policies may cover 50 or more conditions. The exact definitions vary significantly between insurers, two policies with the same premium can have very different coverage. This is why independent adviser advice is essential.

Critical illness cover and your mortgage

A common use of critical illness cover is to clear an outstanding mortgage balance. If you were diagnosed with cancer and unable to work, your mortgage payments would continue even as your income stopped. A lump sum payout allows you to eliminate this obligation, removing financial pressure during what is already a difficult period. Many advisers recommend combining critical illness cover with life insurance in a single policy for cost efficiency.

How critical illness claims actually work

Critical illness cover does not pay out simply because you have been diagnosed with an illness that shares a name with one on the policy; it pays when your diagnosis meets the policy's precise medical definition and severity threshold. Most UK insurers follow the Association of British Insurers' model wordings as a baseline, but many improve on them, which is why two policies covering “cancer” can pay in genuinely different circumstances. The strongest policies also pay a smaller additional payment for certain less severe conditions, such as low-grade prostate cancer or carcinoma in situ, without ending the policy. The Association of British Insurers publishes model definitions that most UK insurers build on. Our guide to critical illness cover explained walks through how claims are assessed.

How much critical illness cover do you need?

A sensible starting point is enough to clear your mortgage and any other debts, plus a buffer to cover lost income and treatment-related costs during recovery, often a year or two of household outgoings. Unlike income protection, the payout is a one-off lump sum, so it needs to do a lot of work at once. An adviser will help you set a sum assured that genuinely reflects your commitments rather than an arbitrary round number, and decide whether to align the term with your mortgage.

Children's critical illness cover

Many policies include cover for your children at no extra cost, paying a partial lump sum if a child is diagnosed with a qualifying condition. The amount, the conditions covered and the eligible ages vary widely between insurers, and some now include cover from birth or for certain congenital conditions. If protecting your children matters to you, it is worth comparing this element closely rather than assuming all policies treat it the same.

Guaranteed vs reviewable premiums, and honest disclosure

Most advisers favour guaranteed premiums, which are fixed for the life of the policy, over reviewable premiums, which start lower but can rise sharply at review. Whichever you choose, the single most important thing you can do to protect a future claim is to answer the insurer's health and lifestyle questions fully and honestly. Non-disclosure, even unintentional, is one of the most common reasons claims are disputed. If you are weighing this against monthly cover, our comparison of critical illness cover versus income protection explains how the two work together.