Compare the best critical illness policies in the UK

What conditions are covered by critical illness?

Critical illness policies typically cover three core conditions that make up for around 80% of reasons for claims:

• Cancer
• Heart attack
• Stroke

However, most critical illness insurances will cover many more conditions and usually include cover against the diagnosis of upwards of 30 different illnesses. Most policies will also pay out if the policyholder suffers permanent disabilities due to injury or illness but you may have to add this at an extra cost.

Other critical illness conditions covered by critical illness cover include:

• Alzheimer’s disease
• Bacterial meningitis
• Benign brain tumour
• Major organ transplant
• Multiple sclerosis
• Parkinson's disease

The cover does vary between providers so it is important to check the small print carefully for all the illnesses listed before applying. There will also be a number of other conditions that won’t be covered, such as early-stage cancers that are non-invasive, and it is unlikely you’ll be covered for serious medical conditions you had before you made your application.

The Association of British Insurers (ABI) provides a ‘Guide to minimum standards for critical illness cover’ that contains a list of illnesses critical illness insurance should cover. A policy must include cover for cancer, heart attack and stroke for it to be described as ‘critical illness’ insurance, and the ABI provides a minimum definition for each of these conditions. It also provides minimum definitions for further conditions that may be included in a policy – insurers must follow these definitions or provide more comprehensive cover.

You should also look out for additional benefits such as ‘total and permanent disability' cover that pays out if you become irreversibly unable to work again – this benefit is included with some policies and has to be added to others and the qualifying criteria will vary too.

Pre-existing conditions can make it difficult for some people to qualify for critical illness cover where the risks of cancer, cardiac conditions or other claimable conditions is higher. However, you should discuss any pre-existing medical concerns with a specialist insurance broker as insurers use varying guidelines so you could still get cover even if you have been declined by an insurer.

What are the different types of critical illness cover?

There are a few different types of critical illness insurance that will determine the events that will warrant a claim. We describe these types here.

Combined life and critical illness cover

There are critical illness insurance policies that will allow you to combine life insurance within your cover. It can be set up one of two ways and it is important to note both so that you choose the right combination type to suit you depending on your personal circumstances.

• Life and accelerated critical illness insurance – combines life insurance and critical illness insurance but will only pay out for the first event that takes place. So, if death happens there is no ongoing critical illness insurance (this wouldn't be needed) but importantly if the insured person claimed against the insurance because they suffered a critical illness, they would forgo their life insurance leaving them without any protection against death. It can be difficult to reinstate life insurance after suffering a critical illness so you should think carefully before buying critical illness insurance that is accelerated.
• Life and additional critical illness insurance – combines life insurance and critical illness insurance so that the insured person can claim against either or both. Clearly, the insured person would be unable to claim for critical illness insurance after death but if they suffered a critical illness, claimed for this and subsequently died, there would be a claim paid in both events as long as you met the policy conditions. This type of critical illness policy cover could help someone to retain the peace of mind that life insurance provides after suffering a serious illness.

Standalone critical illness cover

As the name suggests, standalone critical illness insurance covers the insured person against the illnesses stated under the policy terms only with no claim possibility for death. Although this type of insurance may be suitable for someone who feels that they do not need life insurance, it normally costs around the same to have life insurance included. Most critical illness insurance policies also stipulate that a claim won't be paid if the policyholder dies within 10-14 days of being diagnosed with a critical illness, making the life insurance element sensible to include.

What are the different types of critical illness cover premiums?

There are two different types of monthly premiums that you can be quoted when searching for critical illness insurance – Guaranteed and Reviewable. It is vital that you understand the type of premium that you are quoted and how this will impact the cost of continuing your critical illness cover year on year.

What is the difference between guaranteed and reviewable premiums?

• Guaranteed critical illness cover premiums – these monthly premiums will remain the same from the date you start your critical illness insurance policy until the end date of the insurance. They can be slightly more expensive at the outset but are usually easier to budget for as there will be no unexpected hikes in the cost of your critical illness cover in future years.
• Reviewable critical illness cover premiums – these monthly premiums are reviewed from time to time and can change after the start date of your critical illness insurance policy. Review periods vary between annual, 5-yearly or 10-yearly reviews and you should check the policy terms to understand this. At each review, the insurance company will assess the level of claims they paid compared with what they expected to pay as well as changes in medical treatment and incidence of serious illnesses. Based on the review findings, the insurance company may increase or decrease your monthly premium.

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How much does critical illness cover cost?

How much you pay for critical illness cover will depend on a number of factors, such as:

• Your age
• Whether you smoke
• Your health and lifestyle
• Your family’s medical history
• Your occupation
• The amount of cover you choose
• The number of years you wish to be covered for

To give you an idea of how much you could pay, £100,000 of life cover and critical illness cover for a 30-year old in good health and a non-smoker would be around £25 a month for a period of 20 years. This is likely to increase to around £45 a month for a 40-year old.

Average cost of critical illness cover – £100,000 over 20 years

*Premiums are based on £100,000 of level term life and critical illness insurance over 20 years where the monthly premium is fixed and guaranteed for 20 years from the start of the policy. The premiums assume that the insured person is in good health with no adverse occupational or lifestyle risks

Most critical illness policies will only pay out once, so if you make a claim, you won’t be able to make another claim if you are diagnosed with another illness in the future.

Do I need critical illness cover?

Critical illness cover can be beneficial if you have a family or other dependents who would struggle financially if you were diagnosed with a critical illness or long-term disability and could no longer work.

To calculate how much critical illness cover you need it is worth considering the size of your mortgage, other debts such as loans and credit cards, how much your family would need to cover household bills and childcare costs, as well as potential medical expenses. You should then factor in how much you have in savings and other assets as well as any state benefits you receive. This should give you an idea of how much cover you need, but you can read more in our article ‘How much critical illness cover do you really need?’

Be aware that if you are thinking about taking out critical illness cover, it is worth acting now. Due to advances in medical technology and an increase in claims (as more people survive critical illnesses), many insurance firms are reviewing their policies which could result in higher premiums or a change in the number of illnesses covered in the future.

Children's critical illness cover

Many insurers also offer critical illness cover for children under an adult's policy which will pay out if your child becomes ill with a specified condition. Good critical illness insurance will cover children against child-specific, additional critical illnesses and not just those that the adult is covered against. Some policies also contribute towards childcare costs and funeral costs.

Pros and cons of critical illness cover

Pros

• Tax-free payout
• Valuable peace of mind for you and your family
• You can claim for a wide range of conditions
• Children can be covered within your policy
• Take time out to recover and seek treatment without worrying about how the bills will be paid

Critical illness payout money can be used in any way you see fit – paying bills, childcare costs, travel expenses to receive treatment or any alterations to your home if you are disabled.

Cons

• Critical illness cover can be expensive
• Not all medical conditions are covered

If you are diagnosed with an illness that is not listed on your policy you won’t get a payout. Understanding the different types of cover can also be confusing so it’s a good idea to speak to an independent specialist.

Top 10 critical illness providers in the UK

There are a few things that are worth noting when you assess the Top 10 critical illness providers in the UK:

1. AIG has three different critical illness policies to choose from that vary from a basic to a fully comprehensive one.
2. Guardian is a relatively new insurance company and as such hasn't had enough time to build enough claims to offer a statistic that would be comparable to other insurance companies.
3. Beagle Street only publicised the percentage of life insurance claims that were paid and not the percentage for critical illness insurance claims.
4. Vitality offers different tiers of serious illness cover with boosters that cost extra but make it more comparable to critical illness insurance and although the number of illnesses covered is high, you may find that you receive a smaller payout for some illnesses than you would do with some other insurers.

Top 10 critical illness policies in the UK – Insurer summary

AIG – Critical illness policy summary

• AIG is a global insurance company that operates in more than 80 countries and jurisdictions. It provides a range of insurance products and services.
• Critical illness cover will pay out the full sum assured, or for certain ‘Group II’ conditions it will pay the lower of 100% of the sum assured or £35,000 under the enhanced cover.
• The maximum benefit term is 50 years, although the policy must end before the policyholder’s 86th birthday.
• Payment is received if you survive for at least 10 days after being diagnosed.
• Critical illness cover must be combined with term life assurance.
• Children’s critical illness cover can be added at an extra cost.

Aviva – Critical illness policy summary

• Aviva has over 18 million customers in the UK and provides a range of insurance products.
• Maximum benefit is £2,000,000.
• For certain conditions the payout will be the lower of 25% of the sum assured or £25,000.
• The maximum benefit term is 50 years, although the policy must end before the policyholder’s 76th birthday.
• Payment is received if you survive 10 days after being diagnosed.
• Children’s critical illness cover is included.

Beagle Street – Critical illness policy summary

• Beagle Street is backed by Scottish Friendly Assurance Society and offers life cover and critical illness cover.
• Maximum benefit is based on age. Up to the age of 40, it is £750,000 and it then decreases.
• For certain medical conditions the payout will be 20% of your cover amount up to a maximum of £20,000.
• The maximum benefit term is 40 years, although the policy must end before the policyholder’s 80th birthday.
• Payment is received if you survive 30 days after being diagnosed.
• Critical illness cover must be combined with life insurance.
• Children’s critical illness cover can be added at an extra cost.

Guardian 1821 – Critical illness policy summary

• Guardian was founded in 1821 and revived in 2018 providing a range of protection policies.
• Maximum benefit is £3,000,000.
• For certain medical conditions, it will pay out 25% of the cover amount, up to £50,000.
• The maximum benefit term is 52 years, although the policy must end before the policyholder’s 70th birthday.
• Payment is received if you survive 14 days after being diagnosed.
• Children’s critical illness cover can be added with a choice of £10,000 to £100,000 cover and the insurance can be converted to an adult policy.

Legal & General – Critical illness policy summary

• Legal & General was established in 1836 and provides insurance and investment products.
• Maximum benefit is £3,000,000.
• For certain conditions, the payout will be 25% of your cover amount up to a maximum of £25,000.
• The maximum benefit term is 40 years, although the policy must end before the policyholder’s 70th birthday.
• Payment is received if you survive 14 days after being diagnosed.
• Critical illness cover can be added to a life insurance policy.
• Children’s critical illness cover is included.

LV= – Critical illness policy summary

• LV= has 1.28 million customers and offers a variety of products, including life insurance and critical illness cover.
• Critical illness cover will pay out the full sum assured, or for certain conditions the policy will pay out 50% of your cover amount up to a maximum of £30,000.
• For 17 conditions it will pay double your cover, up to a maximum of £200,000 (on top of your original cover).
• The maximum benefit term is 45 years, although the policy must end before the policyholder’s 80th birthday.
• Payment is received if you survive 14 days after being diagnosed.
• Critical illness cover can be added to a life insurance policy.
• Children’s critical illness cover is included.

Royal London – Critical illness policy summary

• Royal London was founded in 1861 and provides a range of protection policies and pensions.
• Maximum benefit is £3,000,000.
• For certain conditions it will pay out 25% of the cover amount, up to £25,000.
• The maximum benefit term is 50 years, although the policy must end before the policyholder’s 85th birthday.
• Payment is received if you survive 10 days after being diagnosed.
• Children’s critical illness cover can be added.

Scottish Widows – Critical illness policy summary

• Scottish Widows was established in 1815. In 2009 it became part of the Lloyds Banking Group.
• Maximum benefit is £3,000,000.
• For certain conditions it will pay out the lower of 25% of the cover amount or £30,000.
• The policy must end before the policyholder’s 70th birthday.
• Payment is received if you survive 10 days after being diagnosed.
• Children’s critical illness cover is included.

Vitality – Serious illness policy summary

• Vitality is owned by global insurance company, Discovery Holdings. It offers a range of insurance products, as well as Vitality Rewards. See our Vitality review for more information on Vitality Rewards.
• Vitality’s serious illness insurance offers cover for 182 conditions with its comprehensive policy and 153 with its standard policy.
• Maximum benefit is £3,000,000. However, the payout could be anywhere between 100% and 5% of your cover amount, depending on the severity of the condition.
• You can claim more than once.
• Children’s serious illness cover is included.

Zurich – Critical illness policy summary

• Zurich is a Swiss insurance company offering a range of savings, investments and insurance products.
• Critical illness cover will pay out the full sum assured, or for certain conditions it will pay out the lower of 25% of the cover amount or £25,000.
• The maximum benefit term is 40 years, although the policy must end before the policyholder’s 75th birthday.
• Payment is received if you survive 10 days after being diagnosed.
• Critical illness cover must be combined with life insurance.
• Children’s critical illness cover can be added.

Which is the best critical illness policy in the UK?

Deciding which critical illness insurance policy is best for you will depend on how you define ‘best’. For some people, this may be the cheapest policy, while for others it might be the one that covers the most illnesses or conditions and offers a variety of additional benefits. Alternatively, you might feel the best policy is the one with the best claims statistics. Read our article ‘7 tips to buying the best and cheapest critical illness cover’ for more information on choosing the best cover.

How much you pay for your cover will depend on a range of factors such as your age, whether you smoke, your health and lifestyle, your family’s medical history, your job and the amount of cover you choose. Although it might seem logical, more comprehensive critical illness insurance isn't always more expensive than a more basic product so even if the insurer pays out for more conditions or provides more additional benefits, you won't necessarily pay more.

Both those who are employed and those who are self-employed can benefit from critical illness cover as it could provide much-needed financial support if you were diagnosed with a serious illness or long-term disability and could no longer work.

How to get the best critical illness cover

If you are thinking of applying for critical illness cover, it is best to speak to an independent specialist* first. An independent specialist will be able to find the best critical illness insurance and life insurance quotes from all major insurance companies and advise you on the best policy for your circumstances. They can also help you to complete your application forms and provide support should you need to make a claim in the future. Simply click on the link above and fill in the short form to get a quote, with no obligation to take things further.

You'll also qualify for up to £100 cashback if you decide to take out a policy with them.

Alternatives to critical illness cover

There are a few alternatives to critical illness cover as we highlight below:

• Terminal illness insurance – pays out if the policyholder is diagnosed with an illness that is likely to cause death in the near future – usually 12 months. This is different to critical illness insurance which is designed to cover you if you are diagnosed with an illness that you are unlikely to die from. It is usually included with most good life insurance policies.
• Income protection cover – pays out a monthly benefit if you are unable to work due to an accident or illness. Policies will often pay out until your retirement, death or until you return to work, although short-term policies are also available. Payouts are tax-free and typically around 60% or 70% of your salary. You can read more in our article ‘Critical illness vs income protection: Which is best?’
• Life insurance – pays out a cash lump sum to your dependants if you die within the policy term. They can then use this money to pay for household bills and other costs. You can choose the amount of cover you want and how long you want the term to last.

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