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A quick guide to critical illness insurance

LifeSearch author Katie Crook-Davies
5 min read

by Katie Crook-Davies, Protection Writer

See author bio

Katie works with insurers and distributors to make protection propositions more accessible, pricing more transparent and marketing messages more simple.See author bio

Guide last reviewed 10 Oct 2023

Did you know that critical illness insurance can protect you against over 50 different illnesses? Read our simple guide to critical illness insurance to learn more.


What is critical illness insurance?

Critical illness insurance is an insurance product that pays out a tax-free lump sum of money if you fall ill. Illness, sadly, can strike at any time, often unexpectedly and it sometimes leaves families facing financial worries - particularly if the main breadwinner can no longer work. Critical illness insurance is designed to protect you and your family should the worst happen, giving you that extra peace of mind.

An insurance payout can be used however you like, whether it’s to pay off outstanding debts, like a mortgage, to cover private medical treatment, or even just to stay on top of the monthly bills.

What does critical illness insurance cover?

Different insurers offer different critical illness products which cover different illnesses. Generally speaking, all products will cover cancer, heart attack and stroke as a minimum. Some insurers cover just these three illnesses, and others cover more than 50 conditions, including organ transplant, blindness and deafness.

Many insurers now cover illnesses that are less serious, or earlier stage illnesses, to increase your chances of being able to make a claim on your policy. With this, they have also introduced multiple levels of payout, so that the really serious illnesses receive the full cover amount, and those less serious ones receive say 25% or 50% of the cover amount.

Most insurers also protect your children against certain critical illnesses. This money can help to pay for private treatment or to cover lost income if you need to take time off work to care for the family.

There are so many different critical illness insurance policies to choose from. LifeSearchers know the critical illness insurance market inside out so will help you choose the right product based on you and what’s going on at home. Request a call back from us for a frank and friendly chat.

Is it hard to claim on a critical illness insurance policy?

One in two of us will get cancer* at some point in our lifetimes. It’s pretty scary stuff, and proof that serious illness can and does happen.

The chance of receiving a claim payout really varies by insurer, with those covering more illnesses being more likely to payout. Looking at the insurance industry as a whole, £1.2bn was paid out to critical illness insurance policyholders in 2022, with 91% of all claims being paid**.

Claims on critical illness insurance policies typically aren’t paid in cases where policyholders haven’t told the complete truth about their health when they applied for their policy, so it’s really important to always be honest with the insurer upfront.

Are there different types of critical illness insurance?

There are two main types of critical illness insurance:

1. Critical illness insurance with life insurance

Most people who buy critical illness insurance have life insurance also built into the policy. This insurance bundle will protect you against both illness and death if either happens within a certain period of time. Surprisingly, this bundle is often cheaper than buying the two products separately.

Example: Say you buy life and critical illness insurance worth £50,000, which protects you for 20 years. If you fall seriously ill within those 20 years, your policy will pay you £50,000 tax-free, and your policy will end. If instead, you die within that 20-year period, before ever falling ill, the policy will pay your family £50,000 tax-free. So there are two scenarios where you and your family could receive a claim payout from the policy.

2. Critical illness insurance on its own

This type of policy only pays out for illness, not death.

Example: Similar to the previous example, you would receive £50,000 from your policy if you fell seriously ill at some point in the 20-year period but wouldn’t receive anything if you died before ever falling ill. So, there is just one scenario where you could receive a claim payout from the policy.

Who needs critical illness insurance?

If you’ve got a family you want to protect, then have a think about Critical Illness Insurance. Here are a few key questions to ask yourself:

  • What would happen if my family lost my income because I became unable to work due to illness?
  • What changes, if any, would we need to make financially if we lost my income due to illness?
  • Do we have savings or other assets that could support us financially? Are we happy to use these?

Even if you don’t have family members who rely on you financially, critical illness insurance might still be a useful product, particularly if you’re unable to work but still need to cover the household bills.

Not everyone needs critical illness insurance, so it’s worth having a chat with one of our friendly advisers on 0800 316 7253 about your personal circumstances, so they can work out what you need.

How much critical illness insurance do I need?

How much critical illness insurance you need really does depend on your personal circumstances. It’s important to consider your family’s outgoings and how much of your salary do you spend on regular living costs each month. Could your partner cover the outgoings alone or do you have savings which could help? Would you get any financial support from your employer if you fell ill and were unable to work? Are you eligible for state support?

It’s not always easy to work out the right cover amount, there are just so many things that need to be factored into the decision. 

So request a call back from one of our advisers - they’re great with big questions and small details and can help you work out how much critical illness insurance you need.

How much does critical illness insurance cost?

The cost of your critical illness insurance will depend on a number of things, including:

  • Your age
  • Your health
  • Whether you smoke
  • How long the policy lasts
  • How much cover you want, and;
  • How many illnesses are covered by the policy

As a simple rule, the more likely you are to fall ill and make a claim on your policy, the more expensive your cover will be. So the younger you are when you apply for your policy, and the healthier your lifestyle, the lower your insurance premiums will be.

At LifeSearch, we search the market to find the best value insurance for you, based on your personal requirements. Simply request your personalised quote from us now.

What are the best critical illness insurance companies in the UK?

There are a huge number of insurance companies in the UK who all offer slightly different critical illness insurance products. Let us do the heavy lifting and find the best one for you. We work with top UK insurers and, based on who you are and what’s going on at home, we’ll find the best critical illness insurance product for you - at the best price. 



Find out your critical illness insurance options and get a policy that fits your needs

An expert adviser from LifeSearch can answer your questions, explain what options are available and provide fee-free quotes so you know what's right for you.

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LifeSearch author Katie Crook-Davies
Katie Crook-Davies Protection Writer
Katie is an independent insurance consultant who is passionate about protection and wants to share that passion with others through engaging marketing content. She hopes that one day people will get as excited about protecting themselves and their loved ones, as she does!
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