What is critical illness cover?

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Understanding what's classed as a critical illness

When you’re unwell, the last thing you want to worry about is your finances. After all, you may be focused on trying to support your family, keeping them upbeat, or trying to prepare them for the future. That’s where critical illness cover comes in.

Critical illness cover protects you if you are diagnosed with a critical illness (one that is life changing, or life limiting), paying out a set amount to you and your loved ones. It can be used to boost your family’s income whilst you’re ill or allow you to decide plans for your loved ones. It can simply be a safety net whilst you’re in recovery. Critical illness cover can also be a lifeline if you’re diagnosed with a terminal illness, removing financial worries whilst you prepare your loved ones.

What is classed as a critical illness?

Critical illness insurance policies cover many life-threatening or life-limiting conditions, however these will vary between different insurers. The kinds of illnesses covered are usually long-term and serious, where ongoing symptoms are experienced, or life expectancy is impacted.

Every insurance provider has a different list of illnesses they define as critical, so make sure you check what you’d be covered for before you sign up. Of course, there are some similarities, such as heart attacks, strokes and cancers, but quite often it is based on the severity, so it’s important you read the providers policy conditions, so you know precisely what you are covered for. For example, it’s always worth checking which cancers are protected against, and how severe the cancer needs to be before you are able to make a claim.

What is covered by critical illness insurance?

It’s important to have a thorough read of the terms and conditions of your provider’s policy before you agree to take out critical illness cover. You may also want to discuss this with your insurer if you’re not sure of something, either in person or over the phone.

There are some core conditions that are always covered:

1. Heart attacks - there are around 7.6 million people living with heart and circulatory diseases in the UK.
2. Cancer - one in two people born in 1961 are expected to get cancer in their lifetime. 
3. Strokes - around 100,000 people have strokes each year in the UK.

Critical illness policies often cover around upwards of 30 conditions, so it’s worth reviewing each insurers list before making your decisions. Other illnesses often covered include: 

• Multiple sclerosis
• Dementia including Alzheimer’s disease
• Deafness - permanent and irreversible
• Blindness - permanent and irreversible
• Paralysis or paraplegia, including the complete and permanent loss of one or all of the limbs
• Kidney failure - requiring permanent dialysis
• Liver failure

At LV=, you can find the list of conditions we cover and protect against here. In fact, we can pay out the full amount of cover for 38 conditions, including certain heart surgeries and third-degree burn injuries. You may also be entitled to additional payments or enhanced cover if you experience one of a few other, or less severe conditions. 

What isn’t covered by critical illness insurance?

Not every medical condition is covered under critical illness, including those that are more minor like eczema or a cough. However, these lists are determined by insurers, so there might be some illnesses you expect cover for that aren’t included. The most common exclusions, that people may think they can claim for, are:

• Pre-existing conditions, like diabetes or asthma
• Hereditary illnesses, such as sickle cell disease
• Temporary illnesses, like a cold or the flu
• High blood pressure
• Musculoskeletal conditions, such as a bad back, or a hip replacement
• Broken bones

Even if your illness is listed in the conditions that are covered, it must also match the definition given, for example, it might suggest you need to experience continual symptoms.

Also, some causes of critical illnesses may be excluded where it’s clear that the lifestyle choices could directly impact an individual's health. The number and type of exclusions varies between insurance companies, but some examples may include:

• Alcohol and drug abuse
• Hazardous sports and pastimes
• Unreasonable failure to follow medical advice

It is important to ask your insurer what exclusions are in their policies and to read through these exclusions carefully.

Terms and conditions that affect your cover

If you were to pass away before the specified time between diagnosis and death in your policy, your provider may not pay out. For example, if your critical illness policy states no payment will be made if death occurs within 14 days of diagnosis or having an operation, your loved ones won’t receive the payout. However, if you survive after 14 days of diagnosis and before the end date of the policy, a critical illness claim could be paid. If you die within 14 days of diagnosis and you’ve taken out life insurance alongside critical illness cover, a death claim could be paid instead. Not all policies will include this.

It’s worth remembering that critical illness insurance doesn’t usually cover you if you pass away, which is why you may also choose a life insurance policy to assist you. Likewise, critical illness may not cover you for short-term illnesses or longer recovery times, meaning you might want to look into income protection insurance just to see you through your recuperation period.

How does critical illness cover work?

Once you’ve signed up for critical illness cover, you’ll be protected against a pre-determined list of medical conditions. If you fall ill with one of the conditions covered by your insurer, you may be entitled to a payout.

A claim is normally paid providing you survive past a specified number of days after your diagnosis or following an operation. Your provider will pay out a tax-free lump sum (currently tax-free although this could change in the future), allowing you to use it towards your family and loved ones. Sadly, these diagnoses may be terminal, which is why your paid benefit is paid out early, enabling you to decide how your money is used and split.

What does your insurer need to know?

To get the best cover possible, you’ll want to tell your insurer the whole truth. Whilst is can be embarrassing to admit certain medical conditions and lifestyle choices, critical illness providers are trained to lend a kind ear without the judgement. They want to make sure you feel secure with the cover you receive.

Your insurer will ask you questions about your health and lifestyle, so it’s important to be truthful. Unfortunately, any false information shared could invalidate your policy meaning they would not pay a claim and that your loved ones are no longer protected.

What details will your insurer ask for?

As a general rule, you may need to share the following information with your insurer:

• Your name
• Your age
• Your date of birth
• The gender you identify as
• Your address
• Any existing medical conditions
• Any knowledge of family medical history
• Your lifestyle choices, such as alcohol use or smoking
• Your hobbies, especially high-risk ones like mountain biking or climbing
• Your occupation
• The type of cover you want
• The length of cover you want
• If you’d like critical illness cover for you or your children (if the provider offers children’s cover too)

Do you need critical illness cover?

There’s no law or rule that says you need critical illness cover, but for many it’s a lifesaver. Risks of cancer are high in the UK, with one in two of us likely to experience it. Similarly, over 7 million of us suffer with heart-related issues across the country. Sadly, it’s still easy to think it won’t affect us.

Adding critical illness cover alongside a life insurance policy simply offers an extra layer of protection for you and your family in case you have a life changing, or life limiting illness. After all, you’d much rather have it as a safety net in case of an emergency than not at all.

In 2023, LV= paid out over £27 million in support to more than 370 families as part of a critical illness claim. Around six in 10 of all claims were related to cancer, with around 25% of these made just for breast cancer. Heart attacks made up 10% of claims after cancer, with strokes being the third most common reason to make a claim with LV= in 2023.

However, the choice really is yours.

When should you get critical illness cover?

It’s a myth that you need to get critical illness cover when you’re already unwell. It’s unlikely you’ll be able to get cover if you’re already unwell, so most people purchase it when they’re considered medically fit and healthy.

If you’re considering taking out a life insurance policy, whether that’s level, decreasing, increasing or whole of life, your insurer might ask if you want to add critical illness cover. This really is the prime opportunity to do so. It’s often best to purchase life insurance and critical illness cover together, especially as critical illness doesn’t always cover you if you suddenly pass away.

When isn’t it right?

Surprisingly, when you become critically ill, it might not be the best time to purchase critical illness cover. After all, where your life expectancy is diminished or your condition severe, insurers may not provide cover or it could cause you to have much higher premiums to pay.

How much is critical illness insurance?

Critical illness insurance can normally be added on top of a life insurance policy. There are no set figures insurers can charge, especially as the amount you’ll pay highly depends on the level of risk you pose. A healthy person with a high-risk hobby, such as skydiving may be required to pay more than someone with a low risk past time. Likewise, if you’re a smoker, you may also pay extra than a non-smoker, even if you’re only using vape products or nicotine patches.

How do you apply for critical illness cover?

Applying for critical illness cover couldn’t be simpler, especially if you’re also buying a life insurance policy. Here’s how you do it:

1. Understand what you want to be covered for
   When you take out life insurance with critical illness cover, it won’t be just on a whim. You’ll have a reason for buying it. So, if you want financial protection for your family, alongside some additional security in case you suffer a serious life changing illness, it’s worth considering this as your reason.
2. Speak to insurers about their conditions list
   Before you make your decision, you’ll want an overview of what each insurer covers. Whilst you should find each list on their website or through a quick internet search, you can also contact them to find out more about the finer details.
3. Simply add on critical illness cover
   Once you’ve settled on a trusted insurance provider, you may choose to add on critical illness cover whilst you purchase your life insurance policy. Alternatively, if you like the critical illness policies offered by an insurer, you can purchase this separately without the need for life insurance, although some providers like LV= won’t offer it as a stand-alone policy.

Looking for critical illness cover?

At LV=, we only offer critical illness cover alongside our life insurance policies, giving you peace of mind. You can find our list of covered conditions for adults, or you can get in touch today.

FAQs – critical illness cover

What’s the difference between life insurance and critical illness cover?

Life insurance normally pays out if you suddenly pass away, offering your family some form of financial security. The terms of life insurance vary, as do the amounts, but it essentially means your family and loved ones can continue to support themselves in the event of your death.

Critical illness cover may pay out if you’re diagnosed with one or more specific illnesses or disabilities. These payments normally help during recovery periods or throughout treatment, especially when symptoms are ongoing. In certain cases, you may also receive a payment where your life expectancy has been affected by your illness.

Can you get critical illness cover without life insurance?

Yes, you can get critical illness cover without the need for life insurance, however some providers like LV= will only offer critical illness cover when combined with a life insurance policy. However, if you do take out critical illness cover on its own it’s worth noting you won’t be covered if you suddenly pass away.

What cancers are covered by critical illness insurance?

Every insurer will cover slightly different types of cancer and cover different severities when it comes to cancer. Before buying cover, ask the insurer which cancers their policy includes, and how severe the cancer needs to be before it would be paid. For example, benign tumours probably won’t be covered. It’s worth checking the insurers policy for exclusions.

Is the beneficiary of critical illness insurance responsible for funeral costs?

Not necessarily. However, it is usual for the next of kin to be helping the person with the critical illness claim. As the next of kin is normally the spouse, partner or a child of the policyholder, they may also be the beneficiary of any life insurance cover. 

The next of kin also usually arranges the deceased person’s funeral and only at this point are they responsible for the funeral cost, although they can reclaim this from the estate of the deceased person When life insurance is added to critical illness cover, you could use it to leave an extra amount to cover funeral expenses, ensuring your loved ones aren’t out of pocket.