Critical illness

How critical illness cover works, what it pays out for, and what it costs.

• What is critical illness cover, and how does it work in the UK? — Critical illness cover pays a tax-free lump sum if you are diagnosed with a condition that meets the written definition in your policy. You pay a monthly premium; the money is paid to you while you are alive, to use however you need. The policy definition — not the condition’s name — decides whether a claim is paid.
• What does critical illness cover pay out for? — Policies pay out for the conditions listed in the policy wording, each with a written definition of how severe the diagnosis must be. Cancer, heart attack and stroke form the core and cause most claims. Many policies add further conditions, smaller partial payments for less severe diagnoses, and capped automatic cover for children.
• How much critical illness cover do I need? — Add up what the money would need to do: replace your income for a realistic recovery period, clear or reduce the mortgage and other debts, and cover one-off costs such as home adaptations. Then subtract employer sick pay, Statutory Sick Pay, savings and any existing cover. The gap is the sum assured worth quoting for.
• How much does critical illness cover cost in the UK? — There is no single honest figure: premiums depend on your age, health, smoking status, the sum assured, the term length and whether premiums are guaranteed or reviewable. Any “average premium” without a named source and date cannot predict your quote. Fix a specification, then compare written like-for-like quotes.
• Critical illness cover vs income protection: what’s the difference? — Critical illness cover pays a single tax-free lump sum if you are diagnosed with a condition on the policy’s defined list. Income protection pays a regular monthly income — typically a percentage of your earnings — if any illness or injury stops you working, after a waiting period. One clears debts; the other replaces the pay packet.
• Critical illness cover and cancer: how claims work — Cancer is the most common cause of critical illness claims, and every policy defines what counts — usually invasive malignant cancer, with some early-stage or less advanced diagnoses excluded or paid as smaller partial payments. Whether a claim succeeds turns on the written definition, so the wording matters more than the diagnosis name.
• Critical illness cover for children: how it works — Most adult critical illness policies automatically include children’s cover: if your child is diagnosed with a defined condition, the policy pays a capped amount — commonly a fixed sum or a percentage of your sum assured, whichever is lower. Children are not medically underwritten, but conditions present before the policy starts are excluded.
• Critical illness cover and pre-existing conditions — Critical illness cover is fully medically underwritten: you answer health questions, and the insurer offers standard terms, excludes the specific condition, loads the premium, or declines. Conditions you already have are not covered. Your legal duty is to take reasonable care to answer the questions asked accurately — nothing more.
• Do critical illness policies pay out? — Yes — the large majority of claims are paid: 97.9 per cent of individual protection claims were paid in 2024, a record year with £8 billion paid, including £1.3 billion of critical illness claims at an average of £67,600. Declines usually trace to the definition not being met or to inaccurate application answers.
• Critical illness cover for the self-employed — Self-employed people have no employer sick pay and usually no access to Statutory Sick Pay, so a serious diagnosis can stop income immediately. Critical illness cover pays a tax-free lump sum sized to clear debts and fund a recovery period. Sole traders cannot deduct the premium as a business expense.
• Critical illness cover: what is it and why might you need it? — Critical illness cover pays a single lump sum if you are diagnosed with a specified illness, such as some cancers, heart attack or stroke, that meets the policy definition. It does not pay for treatment. Instead it helps with the wider financial impact — mortgage, bills and lost income — and can sit alongside private medical insurance.
• Is critical illness cover worth it? — Critical illness cover is worth it when a serious illness would cost your household more than it could absorb — for example, with dependants, a mortgage, little sick pay or few savings. It is worth less if you already have generous sick pay, substantial savings or employer cover. Most claims are paid, but definitions decide.
• Can you get critical illness cover without life insurance? — Yes. Standalone critical illness cover pays a lump sum on a qualifying diagnosis and nothing on death. Combined life and critical illness policies usually pay once, then end. Standalone cover suits people who already have life insurance or have no dependants, and keeps any separate life cover intact after an illness claim.