Critical Illness Insurance Calculator

Calculating the Cost of Critical Illness Cover

Policy Options that Affect the Cost of Critical Illness Cover

Level of Cover

The amount you want your Critical Illness Insurance to pay out is the most important feature of your policy in terms of its cost. The more cover you apply for, the more you will pay in premiums, it is a linear relationship between the amount of cover and the cost i.e. £200,000 of cover is likely to cost roughly twice that of £100,000 of cover.

Premium Type

There are different types of premiums that insurers offer that will affect the way your policy is priced throughout the length of your policy.

• Guaranteed Premiums will remain at the same price for your policy’s entire lifespan, providing you don’t request any changes to your cover.
• Age-Banded Premiums will increase with age at a set rate, although this rate may differ amongst insurers. Most insurers will have a premium table that presets your premium increase each year over the life of the policy as you get older.
• Reviewable Premiums are regularly reviewed by your insurance provider and will change depending on a number of factors, such as your health, your age and your insurer’s investment performance.

Number of Conditions Covered

The price of your policy will differ depending on the amount of serious illnesses that your policy covers as well as the types of conditions. Policies that cover more conditions or conditions that are more common are likely to cost more than others. However, the extra cost can be worth it when you consider the risk of falling critically ill. With our tools we can present a report which will help you better understand the quality of the different critical illness policies available, looking beyond just the price.

Policy Cease Age

The age at which you choose for your Critical Illness Cover to end will affect your premiums because as we get older, it is more likely that we are going to be diagnosed with a serious illness. Reducing your policy’s cease age by a few years can reduce your premiums, but may put you at risk of being without cover when you need it most.

The Effect of Your Personal Circumstances

Age

As we get older our health declines and applying for most personal insurance policies when you’re older will mean that your premiums will be more expensive.

Current State of Health

As well as your overall health, your height and weight is usually taken into consideration when working out your policy premiums.

Medical History

If you have suffered from any serious health conditions in the past, there are several actions that your insurer may take. They may either place an exclusion on the policy for any pre-existing conditions, cover pre-existing conditions for a higher premium, or offer the policy on a standard term if they don’t believe that the conditions was severe enough to warrant an exclusion.

The way insurers react to pre-existing conditions depends on the condition, its severity, and the underwriting method used by your insurance company.

Smoker Status

With some insurance, smoking regularly can practically double your premiums. You will need to give up smoking for at least a full year in order to benefit from non-smoker premiums, otherwise you can expect to pay considerably more on your Critical Illness Cover.

Lifestyle Choices

Most insurers will ask for some more personal information relating to your lifestyle, such as the amount of alcohol you regularly consume and whether you take part in any dangerous hobbies. If there are any aspects of your currently lifestyle that may increase the risk of you being critically ill, your insurer may choose to either place an exclusion on your policy or increase your premiums.

The combination of options along with your personal circumstances can have a significant impact when calculating the cost of your policy.

You can use our Critical Illness Insurance Calculator to see for yourself how much your policy may cost with the various options you can choose from.

Josh Martin
Independent Protection Expert at Drewberry

Example of Critical Illness Cost Calculator 2018

Below is a example from our Critical Illness Insurance Calculator that works out the most competitive monthly premiums. It assumes the individual is in good health, a non-smoker and wants Critical Illness Cover with Life Insurance that will decrease over 25 years. Such policies are commonly used to cover a repayment mortgage.

As you can see, the price of Critical Illness Insurance increases considerably with age to reflect the fact that you’re more likely to suffer a critical illness the older you get.

£150,000 of Decreasing Life and Critical Illness Cover Over 25 Years
Age 25	Age 45
£16.91 per month	£72.29 per month

Premiums correct as of 15/2/2018

Comparing Critical Illness Insurance Companies

Most Critical Illness Insurance policies cover a set of illnesses ‘as standard’, offering you a full payout if you meet the definition of that illness.

Some may pay out on a sliding scale depending on how serious your experience of that illness was. On top of the illnesses included ‘as standard’ will often be ‘additional’ illnesses which offer a lower payout to reflect the fact that they’re less serious.

	Aegon Conditions covered: 43 Additional conditions covered: 15 Minimum period: 5 years Maximum period: 50 years Maximum age: 84 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000
	AIG Conditions covered: 50 Additional conditions covered: 30 Minimum period: 3 years Maximum period: 50 years Maximum age: 85 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000
	Aviva Conditions covered: 43 Additional conditions covered: 11 Minimum period: 5 years Maximum period: 50 years Maximum age: 75 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000, with an additional £5,000 for the death of a child
	Legal & General Conditions covered: 38 Additional conditions covered: 2 Minimum period: 1 year Maximum period: 50 years Maximum age: 89 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000
	Liverpool Victoria Conditions covered: 43 Additional conditions covered: 20 Minimum period: 5 years Maximum period: 40 years Maximum age: 69 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000
	Royal London Conditions covered: 48 Additional conditions covered: 16 Minimum period: 5 years Maximum period: 50 years Maximum age: 84 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000
	Vitality Vitality’s Critical Illness proposition is named Serious Illness Cover and works slightly differently to Critical Illness Insurance. Its payouts tend to be on a sliding scale, with less severe versions of critical illnesses receiving a proportionate benefit. Conditions covered: Up to 174 Minimum period: 5 years Maximum age: 89 Children’s Critical Illness Cover: Lower of 50% of benefit insured or £25,000

You can get an indication of the cost with our Critical Illness Insurance Calculator however to ensure you take out the most suitable cover that is most relevant to your needs it is best speak with one of our team who can use more complex tools to help ensure you can make an informed decision.

Comparing Critical Illness Insurance can be difficult because each insurer covers different conditions with differing degrees of severity.

Insurance providers that offer cover for a greater number of conditions may not necessarily cover critical illnesses that you have a higher chance of being diagnosed with, which can make comparing policies a complicated matter.

Victoria Slade
Independent Protection Expert at Drewberry