What is the Best Critical Illness Cover?

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What is Critical Illness Cover?

  • Critical Illness Cover pays out a lump sum if you’re diagnosed with one of the serious (i.e. critical) illnesses defined by the policy
  • The most common claims on these policies are for cancer, heart attacks and strokes
  • Critical Illness Cover can encompass as many as 100 conditions, but the typical number is around 40 (although policies with 10 or fewer conditions exist in the market)
  • Critical Illness Insurance is usually bundled with Life Insurance; buying standalone Critical Illness Cover may not work out as cost-effective as buying combined cover

Getting the Best Cover…

When we’re asked what is the best critical illness cover, there’s no simple answer. That’s because it requires a unique response for every individual client.

Insurers specialise in different risk areas and the best Critical Illness Insurance for you will not necessarily be the same as for anyone else.

The best known providers in the UK

Below is a list of the best known UK Critical Illness Insurance providers, some are household names where others are more specialist.

  • Aegon
  • Aviva
  • Guardian 
  • Legal & General
  • Liverpool Victoria
  • Royal London
  • Scottish Widows
  • Zurich

For more on these top providers take a look at our table of top Critical Illness Insurance providers below.

Each insurer has their own definitions of the various serious illnesses they cover. Fortunately, we have a tool to compare each illness definition side-by-side for both current and legacy critical illness plans to ensure you are able to make an informed decision when it comes to your own cover.

Key policy factors to consider

Although no two policies are the same, there are still a number of factors to look for that can help to determine the quality of a policy, such as:

  • Percentage of claims paid
    The proportion of successful claims made each year
  • Number of conditions covered
    Policies will cover a varying number of conditions, but sometimes a policy covering fewer conditions might have better definition of the most common illnesses (e.g. cancer, heart attack, stroke)
  • The definitions of covered conditions
    Check for how many conditions are are ABI-approved or ABI+ definitions.
  • Payments for early stage illnesses and ‘minor’ conditions
    Not every insurer will pay out for early stage or minor incidences of covered conditions
  • Length of the survival period
    This is how long you need to survive for after making a claim to receive a payout
  • Claims notification period
    This is how long you have after being diagnosed to submit a claim to the insurer.

Conditions Covered by the Top Critical Illness Policies

Most policies cover around 40 conditions, including:

  • Cancer
  • Strokes
  • Heart attacks
  • Multiple sclerosis
  • Parkinson’s
  • Blindness
  • Deafness
  • Traumatic brain injury.

However, some may stretch to over 100 conditions. Others will cover fewer than 10 conditions, so you need to do your research to ensure that you’re getting the best coverage.

It is not just about how many conditions are covered…

While a high number of conditions covered can be a decent indication of the quality of a product, perhaps even more important is to look into the level of that cover, including whether ‘minor’ instances of things like heart attacks and strokes will prompt a payout.

For example, some policies include breast cancer but may exclude ‘non-invasive’ forms; this may be the definition even when a lumpectomy or mastectomy is required.

Cover for early stage illnesses such as cancer can be particularly important, especially as around 60% of all critical illness claims relate to cancer.

With modern medicine, people can recover from a wide range of conditions, but their lifestyle and ability to earn can be affected. A policy that can help them through these difficult times can provide the financial breathing space they need.

Victoria Slade
Independent Protection Expert at Drewberry Insurance

Critical Illness ABI-Approved Definitions

The ABI provides model definitions of critical illness conditions, intended to give clients clear understanding of policies and to help them compare products from different insurers.

Following this ABI best practice is optional for insurers so, when you look for a policy, don’t just look at the number of conditions listed – consider how many ABI definitions are used.

You’ll see such enhanced definitions referred to as ‘ABI+’, so a policy with a large number of ABI+ definitions is suggestive of a high-quality product.

How Much Does Critical Illness Cover Cost?

The cost of Critical Illness Cover depends on a number of personal factors including:

  • Age
    The older you are the more likely you are to suffer a serious illness and so the more expensive cover becomes.
  • Medical history / family medical history
    If you already suffer from an illness that may increase the likelihood of you needing to claim the insurer could increase your premiums or place an exclusion on your policy.
  • Lifestyle (e.g. smoking status)
    Being a smoker or leading an unhealthy lifestyle could result in a higher premium.

Where you can’t control your age there are some policy factors you can control to help manage the cost of your plan:

  • Level of Cover
    The more cover you require the higher the cost of your policy.
  • Length of Cover
    The longer you need the cover for the higher the risk to the insurer and the higher the premium you will pay.
  • Type of Premium
    Opt for either Reviewable or Guaranteed premiums. Reviewable premiums will rise over time and tend to be cheaper from the outset but can often become considerably more expensive than Guaranteed premiums over the full term of the policy.

It’s often the same price – if not cheaper – to get Critical Illness Cover with Life Insurance attached than it is to get standalone Critical Illness Insurance.

Effectively, Life Insurance is ‘thrown in’ with Critical Illness Cover for minimal extra cost, so we generally recommend individuals take this opportunity to protect their lives as well as their health.

Sam Barr-Worsfold
Independent Protection Expert at Drewberry

Guaranteed or Reviewable Premiums?

A policy with reviewable premiums is likely to be cheaper when taken out, but don’t let that persuade you that it’s the ‘best’ one; over time you generally find that guaranteed premiums are the cheaper option.

Reviewable premiums can change year-by-year with little way of working out what they’ll be from one year to the next. There could be a hike in the cost of Critical Illness premiums if, for example, the insurer experiences a spike of claims in that particular year.

Guaranteed premiums, on the other hand, are totally fixed at the outset of the policy. Although they are more expensive to start with, this does mean that they remain fixed at that rate throughout the life of the policy.

Best UK Critical Illness Insurance Companies

Aegon

Aegon

Aegon’s Scotland-based UK operations are wholly owned and operated by Dutch insurer Aegon N.V.

  • Maximum cover: £3 million
  • Survival period: 14 days
  • Minimum age: 18
  • Maximum age: 74
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, the lower of 50% of the sum insured or £25,000
Aviva

Aviva

Aviva was founded in 1797, but the Aviva brand as it is today was formed in 2000 by the merger of Norwich Union and CGU PLC.

  • Maximum cover: £1 million
  • Survival period: 10 days
  • Minimum age: 18
  • Maximum age: Policy must end before 75th birthday (maximum entry age 64)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, paying the lower of 50% of the sum insured or £25,000
Guardian

Guardian

Guardian can trace its history back to 1821 when it was founded as Guardian Fire & Life.

It looks at Critical Illness Insurance differently, offering payouts for any form of malignant cancer with histological confirmation as diagnosed by a UK oncologist, including malignant skin cancer. Guardian also features a simplified claims process for heart attacks that only requires confirmation from a consultant that a heart attack has occurred to pay a heart attack claim, rather than needing extensive medical evidence to assess the severity of the attack.

  • Maximum cover: £3 million
  • Survival period: 14 days
  • Minimum age: 18
  • Maximum age: Policy must end before 70th birthday (maximum entry age 65)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Optional, paying any amount from £10,000 up to a maximum of the amount you choose for your own cover or an overall maximum of £100,000
Legal & General

Legal & General

L&G was formed as an insurance company for lawyers, by lawyers in 1836. It has since grown to become one of the country’s best-known financial services companies.

  • Maximum cover: £1 million
  • Survival period: 14 days
  • Minimum age: 18
  • Maximum age: Policy must end before 70th birthday (maximum entry age 67)
  • Minimum policy length: 2 years
  • Children’s Critical Illness Cover: Automatic, paying the lower of 50% of the amount the adult policyholder is covered for or £25,000
Liverpool Victoria

Liverpool Victoria

LV is the UK’s largest friendly society, with more than 5.8 million customers, 1.1 million of whom are members.

  • Maximum cover: £1 million
  • Survival period: 14 days
  • Minimum age: 17
  • Maximum age: Policy must end before 70th birthday (maximum entry age 64)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, paying the lower of 50% of the amount the adult policyholder is covered for or £25,000
Royal London

Royal London

Royal London previously operated Scottish Provident and Bright Grey as separated brands providing Critical Illness Insurance under the Royal London umbrella. From 2016, both have been merged into the main Royal London brand.

  • Maximum cover: £3 million
  • Survival period: 10 days
  • Minimum age: 18
  • Maximum age: Policy must end before 85th birthday (maximum entry age 64)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, paying the lower of 50% of the amount the adult policyholder is covered for or £50,000
Scottish Widows

Scottish Widows

Founded in 1812, Scottish Widows is today part of Lloyds Banking Group.

  • Maximum cover: £2 million
  • Survival period: 14 days
  • Minimum age: 18
  • Maximum age: Policy must end before 70th birthday (maximum entry age 64)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, paying the lower of 50% of the amount the adult policyholder is covered for or £25,000
Zurich

Zurich

Zurich is a Swiss-based global insurance giant, operating in more than 170 countries. It employs around 55,000 employees worldwide, including 4,500 in the UK.

  • Maximum cover: £7 million
  • Survival period: 14 days
  • Minimum age: 16
  • Maximum age: Policy must end before 74th birthday (maximum entry age 69)
  • Minimum policy length: 5 years
  • Children’s Critical Illness Cover: Automatic, paying up to £25,000

If you need any help please don’t hesitate to pop us a call on 02084327333 to speak with one of our experts.

If you are still researching you get instant critical illness quotes comparing the best 10 UK insurers here. It will show you payout levels, policy terms, the number of conditions covered, whether premiums are guaranteed or reviewable and the monthly cost.

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Shahin Maudarun
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