If you ever have a major health scare or emergency, the last thing you want is to be worrying about money.
Critical illness cover (CIC) allows you to focus on your recovery, without the additional burden of wondering how to pay the mortgage or bills.
This guide explains what Critical Illness Cover is, the types of illnesses and conditions covered, and how to assess the benefit level you need.
We also discuss how CIC can be purchased with Life Insurance and the key differences between CIC and Income Protection.
What is Critical Illness Cover?
Critical Illness Cover is a type of insurance policy that provides a single tax-free payout if you suffer a serious illness or injury.
It's a vital financial safety net for you and your family if you suffer a critical illness during the term of the policy.
How soon can I claim after a critical illness?
The benefit amount can be claimed as soon as you're officially diagnosed with a critical illness, injury, or disability as defined in the insurer's policy document.
What you do with the payout is entirely up to you. It could be used to renovate your home to accommodate a disability or simply to pay the mortgage and bills.
But there's nothing to stop you from saving it, particularly if you make a speedy recovery.
Standalone or with Life Insurance
Critical Illness Cover can be a standalone policy or taken out alongside Life Insurance as a multi-benefit policy.
However, the level of Critical Illness Cover doesn't need to match the Life Insurance benefit amount.
For example, you may decide you need £300000 of life cover, but only £100000 CIC. And although the two policies are with the same insurer, you can still claim on both.
It's also possible to take out a combined policy that pays out on the first event only, critical illness or death (or a terminal illness diagnosis).
What illnesses and injuries are covered by CIC?
Each insurer specifies the serious illnesses, conditions, and disabilities they cover. Some of the most common are:
- Heart Attack
- Stroke
- Cancer, excluding early stage or non-invasive cancers. Sadly, 1 in 2 people will develop some form of cancer in their lifetime.
- Loss of a limb such as an arm or leg
- Parkinson's Disease
- Traumatic head injury
- Organ transplant
- Multiple Sclerosis
- Alzheimer's disease
- Total & permanent disability (either included as standard or as an optional extra)
It's also possible to include your children on the policy, though some insurers reduce the payout level for a child claim. Nevertheless, it can still be an invaluable additional benefit. Especially if you need weeks or months away from your business to focus on supporting your child's recovery.
How does the application process work?
In most cases, the application process for a CIC policy is straightforward, and simply involves answering some medical and lifestyle questions during the online application. Typically it takes around 30-40 minutes and your adviser will take you through it.
Depending on your answers, the insurer, with your permission, may request a GP report or seek further information about your medical history. But usually that isn't necessary.
