Critical Illness Cover

Critical illness cover is a type of insurance policy that can help minimise the financial impact on you and your family in the event you were to become critically ill.

Everybody wants to feel that if they were to be diagnosed with a critical illness, they’d at least be able to cope financially. Being diagnosed with a critical illness can strike at any time – at any age – and can turn lives upside down.

Whilst most people understand the need for life cover, less consideration is often given to what would happen in the event they were diagnosed with a critical illness.

Helping you to focus on getting better

If you are unable to work due to critical illness, this can have severe consequences for both you and your family who may be reliant on that financial support. Having access to a sum of money can help alleviate some of the financial stress of the situation and allow you to keep your focus on getting better.

In the event you needed to give up work or if you were to pass away during the length of the policy, the money could be used to help fund the mortgage or rent, everyday bills or just the simple things like the weekly food shop. This can provide some important peace of mind for you and/ or your family when you need it most.

Avoiding financial hardship

You may not be able to return to work after surviving a critical illness or you may need private care or expensive modifications to your home. It is not easy to contemplate preparing for the worst, especially when fit and healthy. However, we all know that life can be unpredictable and so avoiding a situation where someone survives a serious illness but not the ensuing financial hardship can be protected against through having adequate critical illness cover in place.

Provision of a tax-free lump sum

Critical illness cover – whether taken out on its own or as part of a life assurance policy – is designed to pay you a tax-free lump sum on the diagnosis of certain specified life-threatening or debilitating (but not necessarily fatal) conditions. Examples include heart attack, stroke, certain types/stages of cancer and multiple sclerosis.

Choosing the level of cover

The more comprehensive policies will cover additional serious conditions – such as loss of sight or permanent loss of hearing; and total and permanent disability that stops you from working. Some policies will include cover against the loss of limbs. However not all conditions are necessarily covered, and this is another reason you should always obtain professional financial advice.

Providing financial support

Should you be single and have no dependants, a critical illness cover policy can be utilised to pay off your mortgage or provide a lump sum to use as required if you became very unwell. If you’re part of a couple, critical illness cover can provide much-needed financial support at a time of emotional stress.

Pre-existing conditions

Policies may not provide cover for certain pre-existing conditions. Also, if you are replacing an existing critical illness cover policy, you may find that you would lose some of the benefits if you have developed any illnesses since you originally took out the policy.

Seeking financial advice is always a good idea but if you are looking to replace or switch your policy, we would say strongly recommend you speak with a professional adviser beforehand.

Be conscious of exclusions and limitations

Critical illness policies usually only pay out once and so are not a replacement for income. Many policies will offer combined life and critical illness cover and these pay out if you are diagnosed with a critical illness – or die – whichever occurs first. Every policy will specify any exclusions or limitations, and these are likely to differ between insurers.

Flexible cover

Some policies have flexibility that will allow you to increase your level of cover after lifestyle changes such as marriage, having children or moving home. If your existing policy doesn’t provide this option, you might consider taking out a new policy as a way of providing the extra level of cover required.

Defined conditions only

A critical illness policy will only cover you for the conditions specified in the policy document and your condition will need to meet the exact policy definition. Consequently, certain conditions won’t be covered if not deemed sufficiently severe. This can also apply to some conditions if you suffer from them after reaching a certain age – Alzheimer’s disease for example, if diagnosed after age 60.

Survival period

It is most typical for a policy to pay out only after a ‘survival period’. Where applicable, this means that if you were to die within this period, the cover would not pay out – even if the definition of the critical illness given in the policy had been met.

Number of factors

How much you pay for critical illness cover will be dependent on a range of factors, including: your age, the amount of cover you require, whether you smoke and the type of policy you have chosen.

Most policies will include permanent total disability. This may be defined as being unable to work as you normally would; others define as being unable to independently perform three or more ‘Activities of Daily Living’ resulting from the illness or accident.

Activities of Daily Living include:




Dressing and undressing



Transferring from bed to chair and back again

Ensure you are fully covered

On a positive note, medical advances are meaning that more people than ever are surviving conditions that might have killed previous generations. Having appropriate critical illness cover in place can provide you with a cash sum when you really need it and ensure you remain focused on your recovery only.

Making sure you’re fully covered can provide valuable peace of mind to you/ you and your family – don’t risk leaving it to chance. To discuss your requirements or if you would like to receive a personal quotation, please contact us.

Take control of your financial future

Contact First Equitable today and take control of your financial future; together we will chart your journey towards achieving your goals and objectives.