Critical illness insurance: What are the pros and cons?

4 min Read Published: 16 Sep 2022

Critical illness insurance: What are the pros and cons?Critical illness insurance is often overlooked with many people assuming it is either unnecessary or too expensive. Critical illness insurance can, in fact, be relatively cheap and a lump sum payout can often play a crucial part in the recovery process, allowing you to take additional time off work, adapt your home or even seek treatment abroad.

What is critical illness insurance?

Critical illness cover is designed to ease the financial stress and possible long-term effects caused by serious illness by paying out a lump sum in the event of you being diagnosed with a qualifying critical illness. Most insurance companies will cover between 50 and 70 core illnesses, with every insurance company covering cancer, heart attack and stroke (which account for around 80% - 85% of all claims). Most insurance companies will also cover illnesses such as multiple sclerosis, alzheimers disease and major organ failures.

One of the most important things to understand when it comes to critical illness insurance is that no two policies will offer the same benefits and many offer partial payments for some less serious illnesses that may not be covered by other insurers. To understand what is and is not covered, you must check the terms and conditions of the particular policy you are buying. However, a lot of the terminology used may be difficult to understand for a layperson so speaking to a critical illness insurance expert can be extremely valuable which we'll come to later in this article. You should refer to our article, "Compare the best critical illness policies in the UK".

What are the disadvantages of critical illness insurance?

Although there are many advantages to being covered with critical illness insurance, there are other types of illness insurance that could and should be considered by anyone concerned about the financial impact that an illness or injury. Critical illness insurance is designed to cushion the financial blow that a serious illness could cause but if it is the only protection that you have against illness, you may find yourself disappointed if your illness or injury does not fall within the wording of what is covered under your critical illness insurance policy. For anyone concerned about their ability to work, regardless of what type of illness or incapacity is causing this, you should also explore income protection insurance. Income protection insurance and critical illness insurance can work very well together where the income protection replaces your income for any incapacity that stops you from working and the critical illness insurance provides a lump sum to pay for any extra costs that may arise as a direct or indirect result of your illness if it is serious. You can read more about income protection insurance in our article, "A guide to income protection insurance".

What are the pros and cons of critical illness insurance?


Pays out a lump sum

Payout is tax-free

Can be combined with life insurance

Allows you to take time away from work to recover and seek treatment

Many policies will pay out if your children become critically ill

Receive up to £100 cashback - click to find out more


Cover can be expensive

Have to meet the qualifying definition

Different types of cover available which can be confusing - speak to an independent specialist*

Do you need critical illness cover?

Only you can answer that question. If you have ever worried about how you or your family would cope financially to continue paying your mortgage, rent, bills as well as putting food on the table, if you became critically ill then it is likely that you would gain peace of mind from the benefits of critical illness cover.

Before purchasing critical illness insurance you should consider whether Income Protection provides a better solution for you and your family. Income protection is designed to pay a regular income in the event that you are unable to work due to any illness or injury whereas critical illness cover will only pay for the specific illnesses covered in the terms and conditions. Check out our article 'Which is the best Income Protection policy in the UK?.

Cancer, heart attack and stroke account for between 80% - 85% of all critical illness claims

How much critical illness cover should you get?

The amount of critical illness cover you need ultimately depends on your own personal circumstances including what financial protections your employer may offer. Some people will be limited by how much cover they can afford, some will want to cover their outstanding debts, such as their mortgage and any outstanding loans and some people are happy to cover their annual wage.

Often, the best way to understand how much cover you need is to speak to an independent critical illness specialist as they are able to help you understand the perfect amount of cover for your own unique situation. Also, an independent specialist is able to provide monthly premium quotes for every critical illness provider, meaning not only can they find the cheapest quote but they can also recommend the most comprehensive policy. We explain in the next section how to guarantee to get the cheapest and best critical illness insurance policy, including how to get up to £100 cashback.

How to get the best and cheapest critical illness quotes (and get up to £100 cashback)

When it comes to comparing prices of anything these days, the solution tends to be a comparison site. Comparison sites do a great job of providing basic quotes and collating the information in one, easy-to-read web page. For simpler products, like home and pet insurance this works well and I have used them myself, but for more complex products like critical illness cover, it is far better to speak to an independent specialist who can help you to weigh up the advantages and disadvantages of different types of illness insurances.

An independent specialist, unlike a comparison site, will be able to access the whole of the insurance market and they will also be able to advise you on the best cover for your circumstances, as well as help to complete the application forms.

We have partnered with the UK's biggest independent life and critical illness insurance specialists*, simply click the link to speak to an expert for a quote, with no obligation to take things further. 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