Heide’s Blog – 10th July 2020

What is Critical Illness Cover and Do You Need it?

What is critical illness cover?

 Critical illness cover is a type of insurance that pays out a tax-free lump sum if you’re diagnosed with a serious illness, such as cancer, or suffer a heart attack or stroke during the term of your policy. It is not the same as life insurance, which pays out if you pass away.


Critical Illness can be insured against

Why do I need it?

A critical illness, including heart attack or cancer, strikes 14% of men and 12% of women before the age of 65.  In other words, for a couple, there is a 24% chance of at least one of them suffering a critical illness before they reach 65.

The good news is, with today’s medical advances, you have a reasonable chance of surviving the critical illness or even recovering from it.


In these circumstances, the benefit from your critical illness insurance can offer financial support – particularly if you have to stop working.  It offers a tax-free lump sum which could be used, for example, for:

  • paying your mortgage
  • paying for private medical treatment
  • paying school fees
  • covering every day expenditure which you may, in other circumstances, have to find from your hard-earned savings

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

Critical illness cover is designed to benefit you, during your lifetime when you need it most, after you’ve been diagnosed with a critical illness.

In most cases, life insurance only pays out if you die during the term of the policy. It’s designed to help your family to maintain their lifestyle after you’ve gone.

Helping to protect you and your family

What type of cover do I need?

Critical illness cover can be bought as a standalone product or as combined cover with life insurance.

  • Stand alone: having separate critical illness cover means you’re insured for a payout if you’re diagnosed with a critical illness. This is a separate policy from your life insurance plan which pays out when you pass away.
  • Combined cover: a combined life insurance and critical illness policy will only pay out once, either when you die or if you’re diagnosed with a critical illness.

You should consider whether you’ll be buying the policy just for yourself or for your partner too – you are able to take out joint life insurance with critical illness cover.

However, you should keep in mind that these policies will usually still only pay out once – for whomever on the policy is the first to be diagnosed with a critical illness.

It is a good idea to speak to a professional adviser to ensure you have the right level of cover.

Swift Mortgages in an independent adviser with access to a wide range of insurances and protection policies.

Please contact us if you are considering taking out critical illness insurance or any other kind of protection.

We can help find a suitable protection for your own situation.

Call on 01525 309300 or 07903 302895 or send us a few details and we will be happy to talk through your options with you.




Heide’s Blog – 10th July 2020


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