Critical illness cover, also known as critical illness insurance, is a long-term insurance policy to cover specific serious illnesses listed within a policy. Should the worst happen, it gives a tax-free ‘lump sum’ – a one-off payment, to help pay for your mortgage or rent, debts, or pay for alterations to your home such as wheelchair access should you need it, but it’s your choice how you spend it.
Critical illness insurance will pay out if you get one of the specific medical conditions or injuries listed in the policy. But be aware that not all conditions are covered and policy will also state how serious the condition must be.
Every year 1m workers in the UK unexpectedly find themselves unable to work because of injury or illness, according to the ABI.
Examples of critical illnesses that might be covered include:
Certain types and stages of cancer
Conditions such as multiple sclerosis
Most policies will also consider permanent disabilities as a result of injury or illness. It only pays out once and then the policy ends.
Some policies will make a smaller payment for less severe conditions, or if one of your children has one of the specified conditions.