Which illnesses are covered by Critical Illness Insurance?

The number of critical or serious illnesses Critical Illness Insurance covers depends very much on the provider. Each insurer will cover a different number of critical illnesses. There are policies which cover less than 10 illnesses and those which cover more than 100, with the average provider covering around 40 conditions, so it’s an important factor to get right. The ‘core’ illnesses covered are cancer, heart attack and stroke. These are by far the most common claims on these policies, with multiple sclerosis, Parkinson’s disease and benign brain tumour also tending to feature heavily.

What qualifies as a Critical Illness?

You’ll have to develop one of the critical illnesses listed on the policy at the set severity that’s detailed in the policy wording for you to be able to claim on Critical Illness Cove r, which means less serious instances of the above conditions may not always trigger a payout. For instance, depending on the provider and the policy wording, a more minor heart attack where little damage to the heart muscle is observed or a localised, in situ, non-invasive cancer may not be covered. On the other hand, some providers will pay out on any diagnosis of heart attack or cancer by an appropriate medical professional regardless of severity, so it’s absolutely worth shopping around. At Drewberry, we have access to an industry-exclusive tool that examines Critical Illness Insurance policies and looks at those which are the most likely to pay out for someone just like you, e.g. of your age, sex, etc. We’re happy to go through this with you to find a policy that best matches your needs.

How long does Critical Illness Insurance last?

Critical Illness Insurance is typically sold alongside Life Insurance as the two insurances, as a package, rarely cost much more than standalone Critical Illness Cover. As such, Critical Illness Insurance has a term, like Life Insurance. You can set this term for as long as you need, although most Critical Illness Insurance providers will have a maximum age ceiling of 70 years old when the Critical Illness element of the policy ends. Many people use a combination of Life and Critical Illness Cover to protect their mortgage, so it makes sense to set this for the same period as your mortgage lasts for.

What's the difference between Critical Illness and Terminal Illness?

Terminal Illness Insurance is usually included for free with Life Insurance policies. It’s a rider that permits the policy to pay out early if the policyholder is diagnosed with a terminal illness (meaning a doctor has given them a prognosis of less than 12 months to live). This releases the funds from the Life Insurance policy before death so the individual can be financially comfortable during their final illness. Critical Illness Insurance , on the other hand, is an optional extra to add to Life Insurance at additional cost. It will pay out if you develop a critical illness of a specified severity, such as cancer, heart attack or stroke. The two options sound similar but are in fact very different and not interchangeable; it’s possible to recover from a critical illness, for example, whereas that’s not the case for a terminal prognosis.

Do you pay tax on a Critical Illness payout?

No, you don’t typically pay tax on the lump sum you receive from Critical Illness Cover . This is because premiums are usually paid out of income you’ve already paid tax on, i.e. your wages, so you’ve already effectively been taxed on the policy once. This means the payout from Critical Illness Insurance is tax-free should you require it.

What is the Best Critical Illness Cover?

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In this guide:

Getting The Best Cover
What Conditions Are Covered?
How Much Does It Cost?
Top UK Critical Illness Companies
Our Impartial Fee Free Advice
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By Tom Conner BSc MPhil

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.

Compare Top 10 UK Insurers

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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 understand how comprehensive the definition of the illness is, 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.

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry

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.

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Common Critical Illness Insurance Questions...

Best UK Critical Illness Insurance Companies

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 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 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

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

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 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

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 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

Compare Best Critical Illness Insurance Quotes & Get Expert Advice

Taking out Critical Illness Cover can be a bit of a minefield with lots of insurers and even more illnesses to consider.

Where no two policies are the same we have in-house tools which take into consideration both your personal circumstances (such as your health and lifestyle) and the insurers illness definitions. This makes it easy for us to find the best critical illness cover specifically for your circumstances.

Why Speak to Us…

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.

There is no fee for our service
We are independent and impartial
Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
We’ve got bargaining power on our side
This allows us to negotiate better premiums for you than you going direct yourself.
You’ll speak to a dedicated expert from start to finish
You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
Benefit from our 5-star service
We pride ourselves on providing a 5-star service, as can be seen from our 2643 and growing independent client reviews rating us at 4.91 / 5.
Gain the protection of regulated advice
You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
Claims support when you need it the most
You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.

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

Martyn Coates from Drewberry provided an excellent service with prompt handling of any question that we asked him. I would highly recommend Drewberry for anyone wanting Insurance.

Kevin Eaton

02/12/2019

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