Critical illness cover, so recovery can come first.

What is critical illness cover and might I need it?

Critical illness cover typically pays a tax-free lump sum if you are diagnosed with a condition covered by the policy and meet its definition during the policy term. You can use the money however you choose, including reducing the mortgage, replacing lost income or paying for additional care.

It is different from life insurance, which pays on death. It is also different from income protection: critical illness cover is triggered by a qualifying diagnosis, not simply by being unable to work.

It may be suitable if:

• Your household depends heavily on your income
• Your savings would not absorb an extended period of reduced earnings
• Your employer provides limited sick pay or long-term illness benefits
• You would want to reduce the mortgage or other financial commitments
• Illness would create additional childcare, treatment or home-adaptation costs

The number of conditions is not the whole story.

A policy listing more conditions is not automatically better. The medical definitions, severity thresholds and amount paid can differ significantly between insurers.

Two policies with a similar premium can produce very different outcomes at claim. We compare what is covered, how each condition is defined and whether the policy provides full or additional payments—not just the headline number.

Things worth comparing.

• Main conditions. A successful claim for a main condition will usually pay the full cover amount and end that part of the policy.
• Additional or severity-based payments. Some policies make smaller payments for earlier-stage or less severe conditions without ending the main cover. The amounts and definitions vary.
• Children’s cover. This may be included, optional or available at different levels. Check the eligible ages, conditions, payout limits and whether a child’s claim affects the adult’s cover.
• Combined or separate life cover. An integrated life and critical illness policy will usually pay the full cover amount once, after which the policy ends. Separate policies may allow the life cover to continue following a critical illness claim, but the cost must be compared.
• Survival periods. Some insurers require the person covered to survive for a specified period following diagnosis before the full benefit becomes payable.

The quality of critical illness cover lies in the wording, not simply the price. We compare the definitions and benefits across insurers before recommending a policy.