How Much Critical Illness Cover Do I Need?
Working out how much Critical Illness Insurance you need can be tricky. How much Critical Illness Cover is enough? Use our 2024 guide to work out how much insurance is right for you.
Critical Illness Insurance is a policy that pays out a cash lump sum to help you and your family cope financially if you suffer from a specified critical illness as laid out in the policy terms.
Most policies cover around 40 serious medical conditions with the most common claims being for:
There are some policies which will cover more than 100 critical illnesses and others which will cover fewer than 10. It is vital you check the policy wording before taking out a plan so you know exactly what illnesses are covered.
According to a recent Drewberry survey of 3,000 working age adults, when looking back over their entire careers 14.7% of the over-55s had needed at least 6 months off work due to illness or injury. Around 1 in 4 people of this age had been out of work for at least 3 months at some point during their working lives.
Although not every instance of absence from work would result in a successful critical illness claim, clearly being off work long-term is more common than many people think.
Cancer claims are by far the most common on critical illness policies – they made up 60% of leading insurer AIG’s claims in 2017, while 19% of AIG’s claims consisted of heart attacks and strokes.
Victoria Slade
Independent Protection Experts at Drewberry
According to Cancer Research UK, 1 in 2 people born after 1960 will get cancer at some point during their lives.
Although not every incidence of cancer will necessarily result in a successful Critical Illness Insurance claim – early stage incidences of cancer may not meet the policy definition – the likelihood of developing the disease is scarily high.
Statistics from the British Heart Foundation have shown that:
While a heart attack or stroke has to match the insurer’s clinical definition and be of a specific severity to be eligible for a claim, such conditions occur more frequently than we might realise.
No, it’s not necessary to get Critical Illness Cover or indeed Life Insurance if you have a mortgage although it may well be incredibly sensible. This is because it will protect you in the event of you becoming seriously ill or passing away.
Critical Illness Insurance linked to a mortgage will pay out a cash lump sum to pay off a mortgage debt should you suffer a serious illness. It could be the difference between losing and keeping your home if you were unable to work and couldn’t afford your repayments.
Income Protection and Critical Illness Cover are similar in many ways, but they also have important differences to consider before taking out either type of protection.
To make things clearer, we’ve produced a whole guide on Critical Illness Insurance vs Income Protection, but some of the key differences between these two insurances are laid out below.
If you’re unsure whether you need Critical Illness Cover or Income Protection, it’s best to ask for help.
We have some clever tools to help you work out which is the most appropriate cover for your circumstances. Please don’t hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.
Sam Barr-Worsfold
Independent Protection Expert at Drewberry
You may not need Critical Illness Cover if your employer provides you with some form of protection.
Some companies offer group schemes that cover a large number of employees at once – this may include Income Protection and / or Critical Illness Cover. It’s definitely worth finding out from your manager or HR department if you’re already covered – if so, it makes little sense doubling up on cover.
Your employer may also provide you with some level of sick pay that you could survive on for a little while.
However, Drewberry research from 2018 found that 16.2% of people received absolutely no sick pay at all, and nearly half of people got 3 months or less of sick pay, so checking preemptively with your employer is always a positive step.
Even where you do get sick pay for a few weeks or months, it’s worth thinking about the risk of long-term incapacity and how you’d cope with being off work for months at a time with a serious illness.
The government provides links to a number of independent state benefits calculators for you to work out how much money you may be entitled to if you’re off work sick.
However, roughly speaking the main incapacity benefits on offer from the government for working age people are the Personal Independent Payment and Employment and Support Allowance (although other benefits may be available to you depending on your circumstances).
If you’re aged 16 to 64 you could get between £22.65 and £145.35 a week by claiming Personal Independence Payment, although the amount you get depends on how your condition impacts your daily life.
Employment and Support Allowance, meanwhile, starts at just £84.80 per week for the over-25s.
Few people could survive long-term on just government benefits, even if they had savings to supplement them.
As such, some additional protection, such as Critical Illness Cover or Income Protection, can make all the difference if you’re off work sick.
Mike Barrow
Independent Protection Expert at Drewberry
Protecting your financial future is not easy and more often than not there will be a few questions you want answering to make sure you find the most suitable cover at the best price for your circumstances.
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
If it is all getting a little confusing and you want to talk through your options to make sure you find the most suitable cover please don’t hesitate to get in touch.
Pop us a call on 02084327333 or email help@drewberry.co.uk.
Samantha Haffenden-Angear
Independent Protection Expert at Drewberry