Critical illness insurance: What are the pros and cons?

6 min Read Published: 16 Jan 2020

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 pay a crucial part in the recovery process, allowing you to take additional time off from work, adapt your home or even seek treatment abroad.

What is critical illness insurance?

Critical illness cover is designed to ease the financial stress by paying out a lump sum in the event of you being diagnosed with a qualifying critical illness. Most insurance companies will cover between 40 and 60 core illnesses, with every insurance company covering cancer, heart disease and stroke (which account for around 80% - 85% of all claims).

What are the pros and cons of critical illness insurance?

Pros

Pays out a lump sum

Payout is tax-free

Can be combined with life insurance

Allows you to take time out to recover and seek treatment

Some policies will pay out if your children become critically ill

Receive £50 cashback - click to find out more

Cons

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 if you became critically ill then it is likely that you would benefit from the peace of mind that critical illness cover provides. 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 long term due to illness or injury. 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. 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 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 £50 cashback.

How to get the best and cheapest critical illness quotes (and get £50 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 it is far better to speak to an independent specialist. 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 £50 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 

 

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Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.