Critical Illness policies unlikely to cover 3 in 5 ESA claims made for back pain and mental health

According to the Department for Work and Pensions, there were 2.4 million people claiming Employment and Support Allowance (ESA) in February 2016. ESA is a benefit paid to those who have difficulty finding a job because of long-term illness or disability.

Of these claims, 49% were for “mental and behavioural disorders”, a category which includes conditions such as anxiety, stress and depression. A further 12.7% were for “diseases of the musculoskeletal system and connective tissues”, which includes claims made for back pain.

However, it is unlikely that those with either back pain or a mental health condition would be able to make a successful claim on a Critical Illness policy, even if it stopped them working.

What’s the difference between Critical Illness and Income Protection?

Income or cash lump sum?

You receive a cash lump sum from a Critical Illness policy, so although the benefit amount is not linked to your earnings and can be as large as you can afford the premiums for, the sum will be finite and you might have to make it last for a considerable length of time depending on the nature of your illness. Once you have claimed on a Critical Illness policy the policy is terminated, so there is no way of repeat claiming.

A long-term Income Protection policy will pay a monthly income for as long as it takes for you to become well enough to return to work, or until the policy cease age, usually your retirement. Providing you have own occupation cover, the policy will payout if any medical condition prevents you from doing your own job.

If you have a large, fixed debt to settle, such as a mortgage, a Critical Illness policy would work well to repay the mortgage as soon as you make the claim. The money can also be available immediately if you have to make any modifications to your home to accommodate the disability that triggered the claim.

More conditions covered

Critical Illness policies tend to cover between 35 and 60 critical illnesses. What is defined as ‘critical’ and what would therefore result in a successful claim varies between insurers, and some insurers will assess the severity of your condition to make sure it is in line with their terms before making a payout.

Income Protection covers a far wider array of conditions than Critical Illness, not all of which have to be ‘critical’. These conditions can include back pain or mental health problems, as long as they prevent you working; both conditions are among the most common claims on Income Protection policies. To make such claims on a Critical Illness policy, you’d have to suffer to the extent of a “total and permanent disability”, which is not always easy to fulfil.

Cancer, heart attacks and strokes: the critical illness trifecta

“Diseases of the circulatory system”, which includes both heart attacks and strokes, were the sixth-most common reason for claiming ESA but accounted for just 3.8% of all successful claims, or 90,100 in total. Cancer was the seventh-biggest reason for claiming; it accounted for 2.4% of all ESA claims in February 2016 or 55,890 in total.

In comparison, that same month there were 1.2 million people claiming ESA for mental and behavioural disorders and 308,900 people claiming for musculoskeletal issues.

Though Critical Illness policies have their value, it is clear that the biggest reasons for claiming on them — cancer, heart attacks and strokes — account for only a small minority of the population claiming ESA because they are too ill to work.

More common issues by far are mental health and musculoskeletal issues, which in almost all cases would not likely be covered by a Critical Illness policy.

“Too many scenarios”

Tom Conner, Director at Drewberry, comments:

“With the two most common reasons for claiming ESA being mental health complaints and musculoskeletal problems, if you’re looking to protect your income it makes sense to have a policy that covers you for these issues. For Critical Illness cover, there are just too many scenarios that could happen to a customer medically that would fall outside the scope of the policy.

“Although we’ll always look at each client’s individual circumstances before advising them, that’s why we’d usually recommend the vast majority of working adults take out an own occupation Income Protection plan to cover their financial obligations if they are rendered unable to work for practically any medical reason whatsoever.”

Very good service from Rauri – he has been very helpful and thorough.

Kathryn Wright
16/05/2021
Reviews.co.uk Logo
Compare Top 10 UK Insurers
Takes approx. 60 seconds
  • £

Or call us on 0208 432 7333

Compare Top UK Insurer Quotes Logos
Contact Us
Head Office & Pensions and Investments
Senator House
85 Queen Victoria Street
London
EC4V 4AB
Personal Insurance & Accounts Payable
Telecom House
125-135 Preston Road
Brighton
BN1 6AF
Drewberry London Office MapDrewberry Brighton Office Map
Our Core Principles
  • 1You Come FirstWe are a client focused business who always aim to put you first.
  • 2We are ExpertsTo provide you with the best advice, we need to know our stuff!
  • 3We are HumanWe are real people with feelings who are here to help you.
  • 4We are ProfessionalProviding a 5-star service requires a professional approach to everything we do.
  • 5We are here to EducateWe don't believe in sales, we are here to educate so you can make informed decisions.
Finalist - Moneyfacts AwardsFinalist - Cover Excellence AwardsHighly Commended - Protection Review Awards
Proud member of AMII (Association of Medical Insurers & Intermediaries)Proud member of Money Advice ServiceProud member of UnbiasedProud member of BIBA (British Insurance Brokers' Association)

If you are unhappy with our service, we have a complaints procedure, details of which are available upon request. If you are unhappy with how your complaint has been dealt with, you may be able to refer your complaint to the Financial Ombudsman Service (FOS). The FOS website is www.financial-ombudsman.org.uk.

Drewberry Ltd is registered in England and Wales. Companies House No. 06675912

Drewberry Ltd registered office: Telecom House, Preston Road, Brighton, England, BN1 6AF. Telephone 0208 432 7333

Drewberry Ltd (Financial Conduct Authority No. 505473) is an Appointed Representative of Quilter Wealth Limited and Quilter Mortgage Planning

Limited, which are authorised and regulated by the Financial Conduct Authority.

Drewberry™ uses cookies to offer you the best experience online. By continuing to use our website you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacycookie policy.