Critical Illness Life Insurance

Cover that gives you money before you die so you can decide what you want to do with it.

Despite the fact that you’re far more likely to have a critical illness claim than a life claim across a specific term, life insurance remains a more popular product. Critical illness cover gives you the chance to spend your policy money, and critical illness life insurance adds a critical illness policy to your life cover, so the life policy matures upon diagnosis and not only upon death.

If you have a critical illness life insurance won’t help you by itself. That’s the problem with life insurance: you’ll only get a payout if you die. Critical illness policies are different- you receive money upon diagnosis of a critical illness (at least, one of a list of designated illnesses). That means you can choose to spend the money yourself (remember, diagnosis isn’t death)- either on fulfilling your life’s dreams or preparing for your family’s future. Furthermore, the point of diagnosis is the payout point for the policy; if you subsequently recover or a cure becomes available, that’s just fine.

Remarkably, while it’s six times as likely that before you reach the age of 65 you’ll suffer what can acceptably be described as a critical illness life insurance remains a far more popular product.

A very wide range of companies offer critical illness cover (and not just life companies either)- and they all offer slightly different cover. But you can broadly expect “basic” and “comprehensive” levels of cover. Basic cover only includes a standard list of largely fatal afflictions (e.g. cancer); whereas comprehensive cover, at higher expense, can cover a broader range of debilitating but perhaps not final problems, e.g. loss of hearing.

Be aware also that critical illness cover is not the same as income protection schemes- you might want critical illness cover if you can’t work, but there are plenty of problems which might prevent you from working which equally would not trigger a critical illness payout.