Critical illness insurance will pay out if a person is diagnosed with a serious illness but not every policy works in the same way. Furthermore, your own insurance provider may have improved the critical illness insurance that it provides to new customers without upgrading yours.
This article will show you where the main differences lie and how to work out if your critical illness insurance is any good. We'll also show you how to review your existing critical illness insurance to determine whether you would benefit from changing it.
Later in this article we explain how you could get up to £100 cashback if you review your critical illness insurance and take out a new policy with a specialist critical illness adviser*.
What are the different types of critical illness cover?
Critical illness insurance is a type of insurance policy that will pay you a tax-free cash lump sum of money or an income for a certain time period if you are diagnosed with a medical condition that meets the claimable criteria within your policy. If you qualify for state benefits and sick pay, these may support you but can be limited and difficult to access and so critical illness cover is designed to provide peace of mind during periods of incapacity and help to avoid financial strain.
To be called critical illness insurance, policies usually have to meet the minimum standards set out by the Association of British Insurers (ABI). Critical illness insurance is the name that most insurance companies use to describe the insurance that they provide in case you are diagnosed with a serious illness but that being said, almost no two policies are the same. Although there are many similarities in terms of what is covered, different providers offer varying levels of cover and some insurers offer additional extras such as cover for your children.
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How many illnesses are covered on a critical illness policy?
The number of illnesses covered by a critical illness policy varies between different insurance companies and even between different policies offered by the same insurance company. Even when one insurer covers the same illness as another insurer, it may apply different conditions for making a successful claim.
Comparing the critical illness cover provided by different insurance companies is difficult due to the wide and varying range of illnesses that policies can cover. A new policy might improve upon your existing cover in some ways but it may worsen the cover in other areas.
The top 3 critical illnesses covered by a critical illness policy
The minimum number of illnesses covered by a critical illness policy is 3. All critical illness policies will cover the following three illnesses and they make up the majority of the claims:
| Cancer | Heart Attack | Stroke |
Other illnesses covered on the majority of critical illness policies
For companies that are members of the Association of British Insurers, the guide explains the minimum standard for definitions that must be met in order to make a valid claim. Insurance companies can improve on the minimum standard and often do. A minimum standard of definition is described for each of the three main illnesses that must be covered (Cancer, Heart Attack and Stroke) and a further 19 illnesses that may be offered as part of a critical illness insurance policy. We have listed those 19 illnesses below:
| Alzheimer’s | Coronary artery by-pass surgery | Loss of speech | Parkinson’s disease |
| Aorta graft surgery | Deafness | Major organ transplant | Third-degree burns |
| Benign brain tumour | Heart valve replacement or repair | Motor neurone disease | Traumatic brain injury |
| Blindness | Kidney failure | Multiple sclerosis | Total Permanent Disability |
| Coma | Loss of hand or foot | Paralysis of limbs |
Average cost of critical illness insurance
Here are some current prices for critical illness insurance. We have provided prices based on life and critical illness insurance, as the combination policy is usually the most cost-effective and provides a valuable death benefit.
Cost of £100,000 level term life and critical illness insurance over 20 years
| Age | Monthly premium^ for a non-smoker | Monthly premium^ for a smoker |
| 20 | £15.08 | £17.13 |
| 30 | £29.94 | £32.76 |
| 40 | £50.58 | £80.45 |
*the monthly premium is guaranteed to remain the same for the duration of the policy and assumes that you are healthy and have adverse risks when you apply - correct as of 30th May 2024
Cost of £200,000 level term life and critical illness insurance over 20 years
| Age | Monthly premium^ for a non-smoker | Monthly premium^ for a smoker |
| 20 | £26.65 | £30.97 |
| 30 | £47.39 | £64.19 |
| 40 | £95.45 | £158.24 |
*the monthly premium is guaranteed to remain the same for the duration of the policy and assumes that you are healthy and have adverse risks when you apply - correct as of 30th May 2024
Which companies offer critical illness cover?
Critical illness insurance is offered by several life insurance companies, banks, building societies and supermarkets.
You may have even bought your critical illness insurance policy from a company that uses a different company to supply their critical illness insurance. Likewise, your critical illness insurance company may have been bought out by another company that has taken over the responsibilities of providing you with your insurance.
For example, Direct Line's critical illness insurance is supplied by AIG (now owned by Aviva), so your application is assessed by AIG and your policy and any future claim are also handled by AIG.
How to compare critical illness insurance provided by different companies
There are several factors to look at when comparing the quality of critical illness insurance. Comparing them is not simple, especially when you consider the degree of medical terminology in definitions attached to each illness within the policy terms and conditions
For simplicity, we have compared the following parameters of critical illness insurance to give readers some steer in comparing their critical illness insurance:
How many serious illnesses are covered
This is a good measure of the quality of your policy, but you must remember that policies include a specific definition that accompanies each illness it covers. Even when two policies cover the same illness, the definitions could be easier to claim against with one insurer over another.
Children's critical illness cover
Claims for children make up a significant percentage of the overall claims against critical illness insurance policies.
Some companies will only pay a claim if your child suffers one of the main illnesses that are covered for adults. The best insurance will provide cover for a list of additional child-specific illnesses, making the cover more valuable for policyholders with children.
Insurers also have different qualifying ages for children - the best of them provide cover from gestation through to the age of 23.
Partial payment for less serious illnesses
This benefit will allow a policyholder to claim a partial payout if they are diagnosed with a less serious illness.
For example, less serious cancers that do not meet the criteria for a full payout may warrant a partial payout. This type of benefit is especially valuable where the full payout is unaffected by a partial claim. So for the example of cancer, you could still claim if, say you went on to be diagnosed with an advanced type of cancer.
How do I check if my critical illness policy is any good?
Like any other insurance, you expect to get value for money when you buy critical illness cover. Value can be subjective but most people would agree that value can be found in an insurance policy that fulfils some or all of the following points.
Is it affordable over the term of the policy?
Your monthly premium should be affordable over the long term. This can often be as long as 20 or 30 years so do consider how your affordability might change in the future.
People are often surprised to learn that you don't have to choose an equal level of cover for critical illness and life insurance. Critical illness insurance costs four to five times what life insurance does so reducing it without reducing your life insurance can reduce your monthly premium quite significantly.
Does it provide enough money if you claim?
The money you receive from a successful claim needs to make a difference to your circumstances otherwise there is little point to the insurance. The level of cover that you buy can be restricted by what you wish to spend and this is true for most people.
It can be helpful to explore other illness insurances, such as Income Protection insurance and compare the cost and benefits with critical illness insurance.
Does it maximise opportunities to claim?
The critical illness insurance comparison table provided in this article can be used as a guide to which policies provide more opportunities to claim. You can dig even deeper and try to understand which policies provide more opportunities to claim for your gender, age and smoker status. You'll need to enlist free guidance from a specialist critical illness insurance adviser to do this and we explain how to do this later in the article.
Is it easy to claim?
Some insurers have dedicated claims teams who are trained to handle claims effectively and sensitively. Insurance companies that invest in making the claims process easy and supportive can add a lot of value.
Does it provide extra benefits that can be used outside of a claim
It is quite common for insurance companies to provide extra perks that can be used outside of a claim. These can include:
- 24/7 virtual GP access
- Counselling and bereavement services
- Access to a second medical opinion
- Health and nutrition support
Does it include critical illness cover for your children?
Children's cover can be very important to policyholders who have dependents. Critical illness cover for children usually extends to children you've given birth to as well as step-children, adopted children and children who depend on you financially.
If you provide for children you should look closely at the children's cover within your critical illness insurance. Check what age it covers them until and how expansive the list of children's specific illnesses is.
Does it provide flexibility to make changes?
Critical illness insurance policies vary in terms of the flexibility they offer and how easy it is to make changes. Here are some of the options that can provide additional flexibility and help one policy stand out against another:
- Separation option to split joint cover if you go your separate ways
- Guaranteed insurability option to increase your level of cover without answering medical questions again
- Indexation option that increases the level of your cover each year to track inflation
- Waiver of premium benefit that covers the monthly premium if you become unable to work
Should I replace my critical illness policy?
The most common reasons for replacing a critical illness policy are to save money, improve coverage or make changes to the amount or number of years remaining on the policy. Any decision to replace your critical illness insurance should be taken with careful consideration, however, and you may want to check with your insurance provider to see if your current policy can be altered without having to reapply. This will help you to retain the rates based on your age when you first applied which could be cheaper than what is available if you switch.
You should only replace your critical illness insurance policy after weighing up all of the pros and cons and the best way to do this would be to speak to an independent specialist critical illness adviser* who can compare your existing critical illness insurance with every policy that is available on the market today. They can also provide you with a report that states what parts of your cover will improve or get worse whilst scoring these based on your gender, smoker status and age. Wherever possible, you should ask for this report to understand the true value of replacing your critical illness insurance. Finally, if your health has changed since you last bought critical illness insurance, you need to consider whether this will affect a new application as you may be deemed to have a pre-existing condition. Never cancel an insurance policy until you have applied for and received the terms of a new one that you can start, leaving no gaps in your insurance.
Replacing your critical illness insurance if you bought it before 2005
If your current critical illness insurance policy was bought before 2005, you may be covered against illnesses that insurance companies no longer cover for a full payout. This may mean that replacing your policy will reduce your chances of making a viable claim if you suffer one of these illnesses. To ensure you do not lose valuable benefits, always speak to an independent specialist who can compare the cover side by side.
What are the pros and cons of replacing my critical illness policy?
Pros
- You might be covered against serious illnesses that your current policy doesn't cover
- You might gain a better quality of children's critical illness cover
- You may gain cover for less serious illnesses providing you with a partial payment instead of none
- You could access living benefits such as virtual GP services, mental health therapies and second medical opinions
Cons
- You could lose cover against certain illnesses that were historically included
- You could receive tougher definitions for some illnesses making it more difficult to claim
- Your premiums may be higher if your health has changed since you started your original cover
What is the best way to replace my critical illness cover?
The best way to replace your critical illness insurance is to speak with an expert critical illness adviser*. An expert adviser can compare every policy on the market today as well as being able to compare those policies with historical plans that are no longer available to buy. Best of all, there is no fee for the consultation - if they work out that your existing policy is worth keeping, that will let you know and you won't be out of pocket.
The tools used by specialist critical illness insurance advisers can consider your gender and your smoker status when they compare policies for you. This means that they won't tell you a policy is better because it has better prostate cancer cover if you are a woman. Or that the policy is better for you because it has better children's cover if you do not have children you wish to cover. This distinction gives you an even better sense of the quality of the cover that you are buying. Additionally, as a Money to the Masses reader, you could receive up to £100 cashback if you decide to take out a new policy.
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. This 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
