Critical illness cover helps to provide financial security if you are diagnosed with a critical illness or condition.
The impact of such a diagnosis often means your finances will take a hit, whether that’s due to increased medical costs, travel expenses or simply the fact you need to be off work for a longer period of time.
Due to the impact a serious diagnosis can have on your life, some choose to take out a life insurance policy with critical illness cover alongside it. While life insurance would cover you if you passed away, critical illness cover also covers you for a number of serious illnesses and conditions . It will provide you a lump sum of money if you’re diagnosed with a serious life-changing illness, or suffer certain life changing injuries following an accident.
The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser.
Your property is one of the biggest investments of your life and worth protecting. If you were to die or suffer a serious life-changing illness, it will be a big help to you and your family if the mortgage was to be paid off.
Similarly, if you rent, consider how much you’d need to cover your rent, plus any potential increases that may be in your contract. While it’s hard to know exactly how much you may be paying in rent in years to come, you could apply an estimated increase every year to help you figure it out.
If you have children, you already know that they do impact your monthly expenses and the bills may get bigger if they want to go to university. Consider how much they cost you to raise them to adulthood and if you want any potential education fees included. If you’ve already got older children, what about their children, or helping to set your family up for life?
If you fell seriously ill, would you need to pay for additional care and support for your children, or would you need to move somewhere more suited to your condition? Similarly, you may want to consider whether they need any mental health support during your illness, as that can often incur an additional cost.
Even if you rely fully on the NHS, there can be associated expenses such as travel for treatment, alterations needed for your home, care assistance or even employing someone to help with tasks you can no longer do yourself.
This may also include alternative therapies or additional remedies, such as counselling, massage, chiropody or others that you find helpful in your recovery, even if your primary physician hasn’t prescribed it.
If you have any assets such as savings, you might decide to use some of these instead to help provide a safety-net should you be diagnosed with a serious illness. If you do, you could then reduce the amount of cover you think you’ll need, by this amount. Other insurance policies you have, as well as any work-related benefits and could also be taken off too. You may also decide to consider reducing the cover you need by the amount of state benefits payable in the event of ill-health.
Depending on what diagnosis you receive, you may be able to claim certain state benefits either permanently or for an extended period of time. Whilst they can provide additional income during a tough time, there’s no guarantee they’ll be available to you at the time, so that’s worth bearing in mind.
This very much depends on your personal circumstances, and there are certain factors that affect what you might pay for critical illness cover, such as:
Each critical illness policy is looked at uniquely and all circumstances are taken into consideration.
You may want to have as much cover as you have life insurance, as this provides the same level of cover for multiple circumstances, but critical illness cover can get more expensive very quickly. So, you could decide to reduce the amount of critical illness cover to meet your budget. After all, some critical illness cover is better than none. It’s up to you to decide what’s affordable, and if you’re unsure you should consider speaking to a financial adviser.
If you need to claim on your critical illness insurance policy you’ll usually receive the payment as a one-off lump sum. This will help you to pay for any immediate costs, as well as helping towards any longer-term costs, whilst you adjust to life following your diagnosis, or undergoing surgery.
Here at LV=, we only offer critical illness cover in conjunction with life insurance, although other providers may offer this as a separate policy on it’s own.
It’s up to you to decide how much cover you need and, you should also make sure it’s affordable, so your cover can stay in place when you may need it most.
If you've thought about all these things and are still unsure, you should speak to your financial adviser, who will consider your individual circumstances and run through your options. You can also call LifeSearch, who we've chosen to offer customers independent financial advice for protection products.