In what order should the critical illness cover calculation be worked out?

The calculation works best taken in order, not guessed as a round number. Begin with the income gap — net monthly income multiplied by a realistic recovery period, often one to five years — then check that figure against actual household outgoings. Next add debts a lump sum could clear, starting with the mortgage, since removing the largest fixed cost reduces every other figure. Only after that should one-off costs and existing resources be brought in, keeping the final number tied to real circumstances rather than a guess.

What should be subtracted at the end of the calculation?

The last step is to subtract what you already have in place, so the policy only fills the genuine gap. Deduct any contractual employer sick pay, Statutory Sick Pay of £123.25 a week for up to 28 weeks for eligible employees, savings you are willing to use, and any cover you already hold, including an employer’s group critical illness benefit that is easy to forget. What remains is the sum worth quoting for; write each figure down with its date, since pay, savings and cover all change.

Critical illness

How much critical illness cover do I need?

The short answer

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.

Written by Andrew Buscu. Reviewed by Parvoz Haydarov.

Published 15 September 2026. Last reviewed 21 September 2026. Next review due 15 December 2026.

What to know about working out how much critical illness cover you need

Start with the income gap: net monthly income multiplied by a realistic recovery period of one to five years. Read more
Add debts a lump sum could clear, starting with the mortgage, since it is usually the largest outgoing. Read more
Add one-off costs such as home adaptations, treatment travel and childcare help during recovery. Read more
Subtract sick pay, savings and existing cover, including any employer group benefit, to find the real gap. Read more

Thinking about working out how much critical illness cover you need

What works well

The needs method ties cover to real outgoings, not round numbers.
Subtracting sick pay and existing cover avoids paying twice.
A written calculation is easy to review and update.

What to watch

Employer sick pay ends when the job does.
Statutory Sick Pay stops after 28 weeks.
Underestimating the recovery period is the most common gap.

The arithmetic, in the right order

Start with the income gap: how long could your household manage if your income stopped? Multiply your net monthly income by a realistic recovery period — many people work with one to five years — then cross-check against your household’s actual monthly outgoings. Add the debts a lump sum could clear, mortgage first, since removing the largest fixed outgoing reduces every other number. Add one-off costs a serious diagnosis can bring: home adaptations, travel to treatment, help with childcare. For scale on adaptations, a Disabled Facilities Grant in England is capped at £30,000 per applicant (£36,000 in Wales, £25,000 in Northern Ireland), which indicates the order of cost the state is prepared to meet rather than any average (source 2). Then subtract what already exists: contractual employer sick pay (check your contract, not your assumptions), Statutory Sick Pay at £123.25 a week for eligible employees for up to 28 weeks, savings you are prepared to commit, and any cover you already hold — including any employer group critical illness benefit. The remainder is the gap a policy should fill.

Write the calculation down with dates and sources, and revisit it after every major change — a new mortgage, a new child, a pay rise or a paid-off loan all move the number. Whatever the specifics of working out how much critical illness cover you need, the discipline that protects you is always the same: get the insurer’s position in writing, keep the documents with the policy, and make sure the people who would help you claim know the policy exists and where the paperwork lives.

Related guides

Common questions

In what order should the critical illness cover calculation be worked out?: The calculation works best taken in order, not guessed as a round number. Begin with the income gap — net monthly income multiplied by a realistic recovery period, often one to five years — then check that figure against actual household outgoings. Next add debts a lump sum could clear, starting with the mortgage, since removing the largest fixed cost reduces every other figure. Only after that should one-off costs and existing resources be brought in, keeping the final number tied to real circumstances rather than a guess.
What one-off costs besides debts should be factored into the arithmetic?: Beyond mortgage and debts, a serious diagnosis can bring one-off costs worth building into the figure: home adaptations, travel to treatment, and help with childcare while you recover. For scale on adaptations alone, a Disabled Facilities Grant in England is capped at £30,000 per applicant — £36,000 in Wales and £25,000 in Northern Ireland — showing the order of cost the state is prepared to meet, not an average bill.^[2] Use it as a reference point only, since every household’s own needs will differ.
What should be subtracted at the end of the calculation?: The last step is to subtract what you already have in place, so the policy only fills the genuine gap. Deduct any contractual employer sick pay, Statutory Sick Pay of £123.25 a week for up to 28 weeks for eligible employees, savings you are willing to use, and any cover you already hold, including an employer’s group critical illness benefit that is easy to forget.^[1] What remains is the sum worth quoting for; write each figure down with its date, since pay, savings and cover all change.

Sources

GOV.UK. Statutory Sick Pay. Accessed 15 September 2026 (primary source)
GOV.UK. Disabled Facilities Grants: what you’ll get. Accessed 21 September 2026 (primary source)