Critical illness cover explained

While it might be uncomfortable to think about the impact of falling seriously ill, critical illness cover could give you financial support should the unexpected happen.

With critical illness cover, if you’re diagnosed with a severe medical condition covered by your policy and you survive for at least 7 days, you can claim for a lump sum payout. This could help cover the cost of being off work while you’re ill, paying bills or making changes to your home to suit your changing needs. That way, you and your family can focus on your health with fewer immediate financial worries.

Find out how critical illness cover works.

  • A critical illness insurance policy may cover a range of health conditions. If you’re diagnosed with an illness or condition that is covered by your policy, you could claim a lump sum payout. Living with a serious illness is never easy, but having financial help at this time might help lessen the pressure.

    It's important to note that insurance policies can vary based on how long you’d like the cover to last, the potential payout, and premium costs. These costs can be influenced by factors such as your age and health when taking out the policy.

    A successful critical illness payout could help to cover various expenses such as:

    • Treatment costs.
    • Medicine and prescriptions.
    • Mortgage and utility payments.
    • Living costs, for example if you can’t work.
    • Childcare costs.
    • Changes to your property, such as improving wheelchair access.
    • Strengthening your household income, especially if you are the main breadwinner.
    • Travel costs, including to and from medical appointments.
  • It’s worth remembering that a critical illness policy doesn't provide coverage for every type of illness. It pays out only when you make a claim for specific conditions listed in your policy and you live for at least 7 days after your diagnosis.

    When selecting a plan, it's important to consider the terms and conditions as insurers may differ in what they include. Your policy is likely to cover:

    • Strokes.
    • Heart attacks.
    • Certain cancers.
    • Organ transplants.
    • Alzheimer’s/dementia.
    • Parkinson’s disease.
    • Multiple sclerosis.
    • Disability through illness or injury.

    Other conditions might be covered by a standard critical illness policy, or in more enhanced types of cover if the insurer offers it. You can also consider choosing critical illness cover in addition to life insurance.

    While your diagnosis may be covered by your policy, there might still be situations where your claim isn’t successful. In the event of a claim, an insurer will likely contact your GP for confirmation of diagnosis, so it’s important to be 100% honest during your application. Remember to check all policy details before choosing your cover.

    More about Halifax critical illness cover.

    Remember that life insurance policies and critical illness cover have no cash in value at any time. If no valid claim is made by the end of the policy term, it will end, and you’ll get nothing back. Similarly, if you don’t pay your premiums on time your cover will stop, your policy will end, and you’ll get nothing back.

  • The price of critical illness cover can vary based on its term, the level of cover you want, and other factors like your age and health. Before selecting a plan, take some time to consider what life costs you might need help to cover if you were suddenly to fall ill.

    Also, consider the cost of insurance premiums with the rest of your household outgoings, to make sure you can afford regular payments. Here are some of the most important factors that can affect the cost of critical illness cover:

    • Your age.
    • Your health.
    • Your lifestyle.
    • The length of policy.
    • The level of cover you need.

    It’s also important to note that if you’re more likely to get an illness, whether that be due to your lifestyle or family history, your insurance premiums could be higher.

  • While only you can decide what kind of cover suits your needs, it can be reassuring to have cover against the conditions listed on a critical illness policy. It’s also important to think about how you would maintain your lifestyle and keep on top of finances if you became seriously ill.

    You might want critical illness insurance if:

    • you’re the main or sole breadwinner for you and your loved ones
    • you don’t have enough in savings to cover costs if you become sick
    • you don’t have an employee benefits package, like long-term illness cover
    • you only receive statutory sick pay.

    Financial protection can make a difference during difficult times. If you have loved ones who wouldn’t be able to support your monthly expenses on their own, an insurance claim and payout could help relieve this burden.

    At Halifax, you can purchase life insurance and critical illness cover. Scottish Widows – who are also part of Lloyds Banking Group – arrange our life insurance policies. As our life insurance experts, they have helped to protect what matters most for over 200 years. To be eligible for critical illness or life cover, you must be a UK resident and between the age of 18 and 59.

  • When researching how critical illness insurance works, you might have explored other options, such as life insurance. Life insurance also offers financial protection, but there are key differences you should know:

    • Critical illness policies cover the diagnosis of a critical illness listed on your policy, while life insurance covers your death.
    • A lump sum critical illness payout is made to the policyholder, who then chooses how to use the cash. Life insurance payouts are made after the death of the policyholder, with the lump sum going to either a joint policyholder or the executor/s of the will. If the policy was placed in trust , the payout goes to any trustees or beneficiaries.
    • Life insurance policies can be considered part of your estate, meaning they may be subject to inheritance tax when you die. You could consider having a life insurance policy written in a trust. This protects it from your overall estate, ensuring any financial support benefits those you intended it for.

    It’s never nice to think about passing away and leaving loved ones behind. Life insurance can help to make sure they’re provided for in your absence, giving financial stability at a difficult time.

    Learn more about life insurance options.

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Frequently asked questions

  • With critical illness cover, you’ll only receive a payout if your consultant medical professional diagnoses you with a listed condition and you make a successful claim. If the condition isn’t covered by your policy, you won’t be able to claim. Critical illness insurance only covers your health when you are alive.

    Most policies will state that you need to have lived for at least 7 days after diagnosis. Always ask about the conditions covered and how long you must live for after diagnosis. Alternatively, be sure to check the policy terms and conditions for full details.

  • Many insurers won’t cover any pre-existing medical conditions . You may still be able to get a critical illness policy for the future, but your existing diagnoses won’t be covered under the policy.

  • Critical illness policies differ from insurer to insurer so sometimes child cover isn’t always included or an available extra. It’s worth thinking about what cover you and your family need and then talk to your provider. Be sure to read the terms and conditions of a policy to see whether children are covered, what conditions they are covered for and until what age.

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