Best and cheapest critical illness cover in the UK

Serious illness can not only harm your health but can also have a detrimental effect on your finances. Incidences of cancer, heart attacks and strokes are noteworthy and protecting yourself against such events can give you peace of mind that you will have access to a cash sum if it happens to you. A lump sum cash can be desirable in case of serious illness but you will also do well to choose the best cover at the cheapest price - paying more doesn't equate to better quality critical illness insurance.

In this article, we explain how critical illness insurance works and how to find the best-priced policies as well as how to get up to £100 cashback* when you buy.

What is critical illness insurance and how does it work?

Critical illness insurance is a policy that will pay out a lump sum if you are diagnosed with one of the critical illnesses specified in the policy document. Unlike standard life insurance, a critical illness policy will pay out a tax-free lump sum of money on the diagnosis of an illness rather than in the event of death. If you are diagnosed with a critical illness you may not be able to continue working so the proceeds from this policy can help maintain your family's standard of living. You can buy critical illness insurance as a standalone policy or you can buy a life and critical illness cover policy, sometimes called death and critical illness cover. While life insurance covers you for death, a critical illness diagnosis can have a similar financial impact even when you survive. I cover this in more detail later.

What illnesses and conditions does critical illness insurance cover?

All critical illness policies cover heart attack, stroke, and most types of cancer (early-stage and non-invasive cancers may not be covered). Each critical illness insurance policy will cover a list of medical conditions which varies from one policy to the next. To standardise minimum expectations in critical illness cover, the Association of British Insurers (ABI) created a guide which outlines what should be covered. We explain this in more detail below.

Critical Illnesses typically covered by critical illness insurance - Core Conditions

Critical illness cover policies must cover Heart attack, Stroke and some Cancers but may also cover Alzheimer's disease, Multiple sclerosis, Dementia, HIV infection, Kidney failure, Liver failure and Parkinson's disease. Some of the best critical illness insurance policies cover dozens of conditions.

Many of the illnesses listed will be covered based on the severity and specific symptoms of the illness. Critical illness insurance may or may not include cover against permanent disabilities as standard so it is worth checking whether this has been included. The critical illness provider will provide a detailed list of conditions. We recommend that you check out our comparison tables below which compare the number of illnesses covered by each of the top insurers.

Which are the best and cheapest critical illness insurance policies?

To make it simple to compare the different aspects of each insurer's critical illness cover, we have provided you with three tables - the first table compares critical illness cover for adults, the second compares children's cover and the third compares how each insurance company performed when it came to the claims that were paid out on their critical illness policies.

The following explanations will help you understand the aspects of critical illness cover that we have compared.

• Cost of critical illness insurance - for the purposes of comparison we have provided the cost of a level amount of £100,000 of critical illness insurance over a 20-year term. The costs will change according to your age, smoker status and health.
• Number of full payment illnesses covered - the number of medical conditions for which you will be paid the full sum of money as a cash lump sum that you have insured with the policy.
• Number of partial payment illnesses covered - the number of medical conditions for which you can receive a portion of your insured value on the critical illness policy where the remaining cover will continue in case of a further claim for full or partially covered conditions.
• Children's critical illness cover option available - this is where cover for children is included with adult cover, can be added to adult cover or can be bought as a standalone child policy. You can read more in our article "Can you get critical illness insurance that covers children?"
• Percentage of claims paid in 2023 - insurers generally release claims data each year that shows what percentage of the claims made in the previous year resulted in a payout.

Best and cheapest critical illness cover comparison

Insurance Company	Cost of £100,000 cover over 20 years¹	No. of full payment illnesses covered	No. of partial payment illnesses covered	Children's critical illness cover option available	Percentage of claims paid in 2023
Aviva	£37.99	33	2	Yes	91.6%
Aviva Upgraded	£45.23	48	26	Yes	91.6%
Beagle Street	£41.92	18	3	Yes	n/a²
Guardian 1821	£56.10	53	22	Yes	92.0%
Legal & General	£37.86	36	2	Yes	93.0%
Legal & General Extra	£46.73	48	28	Yes	93.0%
LV= standard	£34.15	49	38	Yes	85.0%
LV= enhanced	£53.10	49	38	Yes	85.0%
Royal London	£45.75	47	20	Yes	90.5%
Royal London Enhanced	£57.65	47	20	Yes	90.5%
Scottish Widows	£33.66	30	10	Yes	92.3%
Vitality 1X	£31.94	62	52	Yes	87.8%
Vitality 2X	£44.48	74	69	Yes	87.8%
Vitality 3X	£53.06	74	100	Yes	87.8%
Zurich	£28.84	39	2	Yes	90.0%
Zurich enhanced	£34.25	52	33	Yes	90.0%

¹ All quotes are correct as of 2nd October 2024 and based on a healthy 35-year-old non-smoker with no adverse risks

² The insurer has not made claims data available

Which illnesses are typically NOT covered by critical illness insurance?

A critical illness insurance policy will not cover medical conditions, injuries or incapacity that are not described within the terms of the cover that you choose. So, there are a number of medical conditions that will not be covered which is why it can be valuable to search for the best cover as well as the best price. Some insurers cover critical illness conditions that others do not and the definitions you must meet to make a successful claim can also vary.

The complexity of critical illness insurance policies means that it isn't wise to compare them online.

Common critical illness exclusions

• Non-invasive cancer
• Injuries such as broken bones
• Medical conditions diagnosed before application
• Hypertension (abnormally high blood pressure)
• Pre-existing medical conditions (unless assessed and accepted by the insurer)

With advances in medical diagnoses and treatment, some illnesses may not be covered that were once considered critical, but insurers are always looking at ways to add value so they often will include additional benefits such as Children's Critical Illness cover or perhaps partial payments if you are diagnosed with a less serious illness such as an early stage cancer.

Although serious pre-existing medical conditions can make it difficult, speaking to a critical illness insurance expert* could help you to find an insurer that can offer cover as insurers differ in how health is assessed and an expert can navigate you to the most favourable insurer for your particular health circumstances.

Always check the illnesses covered and qualifying conditions before taking out or replacing a critical illness policy.

This is not always easy to do as definitions of illnesses can be full of medical language that isn't immediately clear to the layman. Speaking to a specialist critical illness insurance adviser* will help if you're not sure that you're comparing like-for-like as they have access to tools that produce reports to show you the real differences between policies and the cover they provide against illness or injury.

Best critical illness cover policies for cancer

It is common to come across critical illness insurance when you're looking for some financial protection in case you are diagnosed with cancer. For many people, seeing a family member or friend go through financial difficulty after a cancer diagnosis can be a trigger to seek out some protection in case this were to happen.

Cancer is expected to affect 1 in 2 people in the UK according to Cancer Research UK where the findings also point out that almost 50% of cancer patients survive for 10 years or more. Although increasing survival rates is positive news, many of those who survive may require time away from work or caring duties in order to receive treatment. The financial burden on families and individuals can be crippling and critical illness insurance can help to alleviate some of this worry.

All critical illness providers will cover most types of cancer but every insurer does not cover early-stage cancers so you should select your insurer carefully. Some insurers pay part of your insured amount if you are diagnosed with early-stage cancer but the amount or proportion will vary. You'll find some of this information in the critical illness comparison table above.

You can read about the cover for cancer using critical illness in detail in our article, "What cancers are covered by critical illness insurance?".

Types of critical illness cover explained

Standalone critical illness insurance

This is a policy that pays out a lump sum only if a critical illness is diagnosed within the term of the policy. This is the cheapest form of critical illness insurance but does not provide life cover - it will only pay out if the insured person is diagnosed with a critical illness or disability that is covered within the terms of the policy. Think carefully before buying standalone critical illness as it is often more cost-effective to buy critical illness cover combined with life insurance as the cost of the additional life insurance is often negligible and so becomes an attractive proposition (and gives you extra peace of mind should the worst happen). Bear in mind that critical illness cover pays out after a specific survival period from the point that you are diagnosed, usually between 10 and 30 days. If death happens before this time has elapsed, regardless of the diagnosis, you won't be able to claim unless you have included life insurance.

Combined life insurance and critical illness cover

This is a policy that pays out a lump sum if you die or are diagnosed with a critical illness within the term of the policy. The life insurance element will usually include terminal illness benefit too so that an early death claim can be made if the insured person is likely to survive for less than 12 months. Typically there are two ways to combine life insurance with critical illness cover.

Life and accelerated critical illness insurance

This cover combines life and critical illness insurance and pays out on either death or diagnosis of a listed critical illness, but not both. So, if you suffered a stroke and subsequently died, you would only receive one payout. This is the cheaper option but keep in mind that if you do suffer a critical illness and have to claim against your combined insurance and don't have any separate life insurance, you'll probably struggle to buy more life cover due to your health.

Life and additional critical illness insurance

With life and additional critical illness insurance, if you claim because you are diagnosed with a critical illness and receive a payout, the life insurance will continue and subsequent death would warrant another claim and payout. It does come at an extra cost but your life insurance is protected.

Most policies won't indicate the type of combined policy you are buying but you'll be able to find wording within the terms that confirm whether or not your life insurance will continue after you make a critical illness claim. Do check this or ask the insurance company to clarify.

Part of a decreasing term/mortgage protection life insurance policy

Mortgage protection life insurance is the cheapest form of life insurance cover (because the sum assured decreases over time) and is designed to pay off your mortgage in the event of death within the term of the policy. However, if you were diagnosed with a critical illness and unable to work, your monthly mortgage payments would still need to be paid. Adding critical illness cover to your mortgage protection insurance would pay off your outstanding mortgage if you were diagnosed with a critical illness thus protecting your family's financial future. You can choose a different amount of critical illness insurance for your mortgage depending on what you want to spend so that if you do suffer a serious illness, there is some money to keep paying towards your mortgage or to reduce the balance of your mortgage down to a manageable amount.

Fixed vs Reviewable critical illness policy

Some critical illness policies offer the option to have a fixed premium so that the monthly price that you pay doesn't change for the duration of your insurance policy term. The alternative is a reviewable premium that can reduce or increase over the policy term based on the insurance company's review.

Guaranteed premium critical illness cover

With the fixed or guaranteed premium option, premiums will remain at the same level throughout the policy term.

Reviewable premium critical illness cover

With the reviewable premium option, your policy will be reviewed after a period of time, typically every 5 years, and premiums may either go up or down based on a variety of factors such as the company's claims history, the impact of medical advances, economic factors such as a rise in interest rates and also potential future claims. Your specific health circumstances will not be considered.

Who should get critical illness cover and is it worth it?

If you are a partner or have a dependent family then life insurance is essential to protect your family's financial future. To provide greater protection for their future it would be prudent to include critical illness insurance as part of the same life insurance policy or as a separate contract.

According to the insurance company LV:

• 1 in 2 people born after 1960 is expected to get cancer in their lifetime.
• Claims for a heart attack are only exceeded by those for cancer so it is the second-largest reason for claims against critical illness insurance policies.
• There are more than 100,000 strokes suffered in the UK every year, that's a stroke at least every 5 minutes.
• Strokes are a major health problem and are the single largest cause of disability for people in the UK
• Many of those suffering a critical illness will not be able to work again

The amount of critical illness cover you choose will be dependent on your personal circumstances and your available budget. As a minimum, the level of cover should be enough to pay off your outstanding mortgage or reduce it down to a manageable level in the event of being diagnosed with a critical illness. You should consider the financial impact if you were unable to work due to a serious illness and factor this into the level of cover you choose.

How much does critical illness insurance cost?

The price of critical illness insurance varies across different insurance companies but so does the cover that they provide but a higher monthly premium isn't always an indication of a better quality of critical illness cover.

Factors that affect the cost of critical illness insurance

• Age
• Smoker status
• Medical history (including the medical history of your immediate biological family)
• Lifestyle
• Sum assured (the amount of cover you choose)
• Term (the period of time that you take the cover for)

Each application for critical illness cover is assessed individually and premiums and cover provided could vary widely between people of the same age, depending on their medical history and lifestyle.

However, as a rough guide £100,000 of life insurance with critical illness cover over 20 years for a 30-year-old non-smoker would be around £25 per month. The premiums would rise to around £45 pm for a 40-year-old non-smoker and just over £100 pm for a 50-year-old non-smoker.

What to look for when considering critical illness cover and how to get the best life insurance for you

If you are considering critical insurance cover then you need to have a clear idea of the following:

• How much cover do you need?
• How long do you need the cover for?
• Do you want to combine critical illness cover and life cover in one policy?
• Do you want the premiums to be guaranteed or reviewable?
• Any medical conditions that you currently have or have had in the past

Once you have a clear idea of what you are looking for in a critical illness policy then you should decide the best critical illness cover provider for you by considering the following:

• Number and type of illnesses covered
• If diagnosed with a critical illness at what stage will payment be paid?
• How soon after diagnosis do you have to make a claim?
• Will they provide the amount of cover and the term you require?
• Are the premiums within your budget?
• Are there any exclusions within the policy?
• What is the provider's track record in paying out claims?
• Do they offer additional benefits such as children's cover?

Best Companies for Critical Illness Cover Payouts

There are dozens of critical illness insurance providers, including policies provided by well-known and well-established insurers such as AIG, Aviva, LV=, L&G, Guardian 1821, Royal London and Zurich, but it is very difficult to make a judgement on which is the best critical illness provider overall due to the number of variable factors to be considered. However, you should consider the following areas (in addition to those above) when choosing a critical insurance provider.

• The reputation of the provider, including the history of claims paid
• Clarity of policy wording
• ABI and ABI+ approved illness definitions

We have provided a handy comparison table earlier in this article that compares the number of core conditions covered by each insurer, as well as additional illnesses covered (where a smaller portion of the benefit is paid due to the less serious nature of the condition). We have also confirmed the most recent claims statistics which are available for each of the companies.

According to the Association of British Insurers, 90.5% of claims were paid in 2023, a slight decrease from the 91.6% of claims which were paid out in 2022. However, the total amount paid out in claims increased over the same period by 13% to £1,359 million.

How to compare critical illness cover

The type of insurance you may need depends on your personal circumstances and the things you may be worried about personally. The largest number of claims are for cancers, heart attacks and strokes so despite there being a lot of information to digest, having some cover rather than none is a good place to be.

When researching any insurance product you should engage the services of an expert in the field who can research the market on your behalf and find the best critical illness insurance policy as well as the best value policy for your needs.

LifeSearch* is one of the UK's largest independent critical illness insurance specialists and I have personally vetted their service. They will save you time and money in your search for the best cover available to meet your needs. As we explained earlier, there are lots of things to consider when it comes to critical illness cover and so it would be wise to put some time aside to speak to an expert who can advise you as to which policy is best for you. Especially as there are other illness insurances that you should consider such as income protection insurance which may be more suited to your needs. The service is free and only takes a few minutes, simply click on the link* and complete the short form to receive a call back at a convenient time. There is no obligation to take things further however if you decide to take out a policy you will qualify for up to £100 cashback.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article - LifeSearch