Critical Illness Cover
Provides you with a tax-free lump sum if you're diagnosed with a critical illness such as cancer, heart attack or stroke.
A serious diagnosis is hard enough without worrying about money.
Critical Illness Cover pays a tax-free lump sum if you're diagnosed with a condition such as cancer, a heart attack or a stroke, giving you the breathing room to focus on treatment and recovery rather than bills.
At V Finances, we take the time to understand your circumstances so we can match you with cover that genuinely fits your individual needs.
What is Critical Illness Cover?
Critical illness cover is a type of insurance that pays out a tax-free lump sum if, during the policy term, you're diagnosed with or undergo surgery for a specified serious illness covered by the policy. To qualify, the condition must meet the insurer’s definition and you must survive for a minimum period after diagnosis or surgical procedure (typically 10–14 days, depending on the provider). Only the conditions specifically listed in the policy are covered and no others.
It's designed to help support you and your family financially while you deal with your diagnosis so you can focus on your recovery without worrying about how the bills will be paid.
Who needs Critical Illness Cover?
If you were diagnosed with a critical illness, would you want your mortgage paid off or access to a lump sum to help cover expenses such as nursing care, home adaptations, or a mobility vehicle? Critical illness cover can provide that financial support, allowing you to focus on your recovery rather than your finances.
As this type of cover is designed to help with the additional costs associated with serious illness, it may be worth considering if:
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You rely heavily on your income to support yourself or your family.
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You don’t have sufficient savings to maintain your lifestyle if you became seriously ill or disabled.
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Your employer’s sick pay or benefits package wouldn’t support you for an extended period off work.
Even if you already have critical illness cover through your employer, it’s worth considering a personal policy. Workplace benefits can change if you move jobs or are made redundant, and a future health condition could make it difficult to secure cover later.
Which illnesses are covered by a Critical Illness policy?
It's important to understand that critical illness policies do not cover all illnesses.
A wide range of conditions are covered, including those meeting the standard definitions set out by the Association of British Insurers. These typically include Alzheimer’s disease, heart attack, stroke, and certain types of cancer.
Full details of the conditions covered are outlined in the policy summary booklet provided by each insurer.
What is Total and Permanent Disability (TPD)?
Total and Permanent Disability (TPD) is an optional benefit which can be added to a critical illness policy.
It provides a payout if you become permanently unable to work or carry out everyday activities due to illness or injury, even if your condition is not one of the specified critical illnesses listed in the policy.
To qualify for a payout, the level of disability must meet the insurer’s specific definition. This is usually based on one of the following:
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Own occupation – you are unable to perform your specific job
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Suited occupation – you are unable to carry out any job suited to your education, training or experience
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Work tasks / activities of daily living – you are unable to carry out a number of everyday physical activities
The exact definition used will depend on the insurer and your personal circumstances, and it is important to understand how this is defined within your policy, as it can affect the likelihood of a successful claim.
How does Core Critical Illness Cover differ from Upgraded/Enhanced Critical Illness Cover?
Core Critical Illness Cover provides protection for a standard list of serious conditions, typically in line with the definitions set out by the Association of British Insurers. It is designed to cover the most common and severe illnesses, such as cancer (of a specified severity), heart attack and stroke.
Upgraded or Enhanced Critical Illness Cover offers a broader level of protection. In addition to the core conditions, it may include a wider range of illnesses, less severe (or earlier-stage) conditions, and additional benefits such as partial payouts, children’s cover enhancements, or access to support services.
The main differences are the breadth of conditions covered, the level of definition applied, and the additional features or benefits included, with enhanced cover generally providing more comprehensive protection at a higher cost.
How does Critical Illness Cover work?
You need to consider whether you want level cover or decreasing cover. It's ok to have multiple policies that meet different needs e.g. a decreasing term policy for a repayment mortgage and a level-term policy for a lump sum to cover medical bills, making adaptations to the home, purchasing a mobility vehicle or to support living costs.
Level Cover - You choose a lump sum that meets your needs, and how long you want your cover to run for. You will then pay the same amount each month until your policy ends. You might choose this option if you want to help cover interest only mortgage payments and other financial commitments. You can choose to make your cover amount increase in line with inflation. This means that your monthly payments may rise but ensures that the lump sum won't be worth less in the future because of the rise in the cost of living.
Decreasing Cover - The value of your cover goes down each month, but what you pay stays the same for the duration of the policy. This option is most suitable if you have a repayment mortgage.
What's the difference between Life Insurance and Critical Illness Cover?
Critical illness cover helps to support you and your loved ones financially if you've been diagnosed with a specific condition. You'll receive a lump sum payment to help cover the costs of treatment, or to help pay the bills.
Critical illness insurance usually doesn't pay out if you pass away. This is where life insurance comes in.
Many insurers will offer both types of cover at once, so make sure you understand what each policy offers before you buy.
When you wish to use critical illness cover for paying off your mortgage, you may wish to include life insurance as part of your policy so that if you don't survive the 10-14 day survival period following diagnosis or surgical procedure, then your mortgage can still be paid off, removing the financial burden for your loved ones.
Bear in mind that life insurance and critical illness cover policies only pay the full cover amount once on a valid claim, and end after that. They have no cash value at any time, and if your payments stop, so does your cover.
What is a Terminal Illness benefit?
Some insurers will provide what's called a terminal illness benefit as part of their life insurance cover.
This means you can receive your life insurance pay out before you pass away if you're diagnosed with a terminal illness that meets the policy definition, and you're not expected to live longer than 12 months.
Many people think they have critical illness cover when in fact they have terminal illness benefit as part of their life insurance. With critical illness cover, you do not need to have a terminal illness in order for the policy to pay out.
How much cover do you need?
That all depends on your needs and circumstances. If you have a mortgage, then you need a policy that covers your mortgage amount in full. Any additional cover will be based on your individual circumstances.
How much does Critical Illness Cover cost?
That all depends on how much cover you need. Cost is dictated by your age, smoker status, occupation, health status, how much cover you need and how long you need it for.
Once your cover starts, you will need to pay by monthly direct debit to keep the policy active.
What is a non-weighted premium?
A non-weighted premium is where the broker does not add any additional margin to the insurer’s price beyond the commission already paid by the provider. This means you are paying the insurer’s standard premium, with no extra uplift applied.
At V Finances, we only use non-weighted premiums, as this ensures the best possible outcome for our clients. By not applying any additional charges, we can offer the same level of cover, with the same insurer and policy term, at a lower monthly cost than brokers who use weighted pricing.
By contrast, a weighted premium includes an additional margin set by the broker, increasing the overall cost of the policy without enhancing the level of cover.
Does the cost increase over time?
We only recommend policies that have guaranteed premiums. This means that the monthly cost is the same through the whole policy term.
If you have a policy where the cover amount increases with inflation, then your premiums will also increase due to inflation but not due to any claims or changes to your health.
Can you get Critical Illness Cover after being diagnosed?
Most insurers will ask about your medical history when you apply for critical illness cover.
If you have any pre-existing conditions, it’s important to disclose these to your broker during the application process.
Having a pre-existing condition doesn’t necessarily mean you won’t be able to obtain cover. However, as certain conditions may increase the likelihood of future illness, an insurer may choose to decline the application or apply exclusions relating to those conditions within the policy.
Can I get Critical Illness Cover for my children?
Children’s cover can provide a financial payout if your child is diagnosed with a specified critical illness. This can help support you at a time when you may need to take time off work or spend extended periods in hospital with them, giving you added protection and peace of mind.
Full details of the conditions covered are outlined in the policy summary booklet provided by each insurer.
Some insurers offer children's cover as standard whereas others will charge an additional fee to cover them.
A select few insurers will allow you to add children's critical illness to a life insurance policy even if you don't take any critical illness cover for yourself.
How do I apply for cover?
You will need to answer a medical questionnaire as the insurer needs to know what risk they are insuring and whether they can offer you terms. We will offer you the choice of going through the medical questionnaire with us or some insurers will let us send you a link to fill it out yourself.
If you have any pre-existing conditions, it is worth having information to hand before applying for cover as the insurer may need to know dates of diagnosis/treatment, names of medication etc. You should also know your current height and weight.
Why should I use a protection broker like V Finances?
We have over a quarter of a century of experience in giving tailored advice specific to your circumstances.
We have established relationships with insurers and can check any pre-existing conditions in advance of an application to ensure we find the best fit for you.
We will look after all of the process from start to finish and keep you updated every step of the way.
We are regulated and authorised by the Financial Conduct Authority, so you get the same protection as if you were going direct to an insurer but with the added bonus that we search for the best deal across the insurers we use.
