Critical Illness Cover in the UK – Protect Your Family’s Future

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What is critical illness cover?

Income protection insurance does exactly what it says – it replaces your income if you can’t work due to illness, injury, or involuntary unemployment. But rather than “replacing” your income, it’s really about protecting it from unexpected loss. Imagine you break your leg on a Sunday – would you be fit for work on Monday? Probably not! And you shouldn’t have to worry about money while recovering. That’s where income protection comes in. Also known as ASU, it provides monthly payouts to cover essentials like rent, bills, and household costs, so you can focus on getting back on your feet.

How is critical illness cover different from life insurance?

Critical illness cover and life insurance have a lot in common; both pay out tax-free lump sums in the event of a claim, and both protect your pocket (and your peace of mind!) from the unexpected.
But when it comes down to it, there’s one key difference: while life insurance pays out if you die during the policy duration, critical illness cover will give you a lump sum if you’re diagnosed with one of the critical illnesses (for example cancer) listed in the policy wording. Each insurer covers different illnesses, so you should always check your policy wording at purchase.

Who typically needs critical illness cover?

Benefits of Our Insurance

Financial Security During Illness

Support for Living Costs

Access to Better Treatment

How does critical illness cover work?

When you take out a critical illness cover policy, you agree to pay your insurer a monthly premium for the lifespan of the policy. If you are diagnosed with a serious illness during that period, your insurer will provide a tax-free lump sum payout, usually up to £25,000, though some policies may offer higher amounts. This money is completely yours to use however you choose – whether it’s covering living expenses, paying off debts, or funding treatment. Different insurers may cover different illnesses, but most critical illness cover will typically include cancer, dementia, multiple sclerosis (MS), stroke, heart attack, and loss of limb. To understand the full list of illnesses covered by your critical illness policy, it’s important to carefully review your policy documents.

Why consider critical illness cover in the UK?

There are many reasons why it’s worth considering critical illness cover if you live in the UK, the most obvious being the limitations of the NHS when it comes to treatment. Setting aside the excruciating wait times that have characterised our health service in recent years, the fact of the matter is that there are many cutting-edge treatments that simply aren’t available on the NHS.
Using the tax-free lump sum provided to you by a claim, you can seek out private healthcare without worrying about how you’ll pay for it. That means treatments and medications that the NHS can’t provide; new-fangled ways of handling severe illnesses, instead of the usual means of public healthcare.

But private healthcare isn’t all that your critical illness claim payout could cover. Once you receive your benefit after your diagnosis, you can cover things like mortgage or rent payments, family expenses, childcare— whatever it is you need.

Key Features

Claim periods & policy terms

You can usually claim for up to 6 or 12 months, depending on the income protection policy. Policies typically exclude pre-existing conditions, substance use, self-harm, and voluntary unemployment. If you have complex health needs, a tailored policy may be best

Tax-Free Lump Sum

Receive a one-time, tax-free payout if diagnosed with a covered illness, to use for treatment, home changes, or daily costs.

Comprehensive Coverage

Covers major conditions like cancer, stroke, heart attack, MS, and more, with some policies including organ transplants and advanced illnesses.

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Compare Critical Illness Cover Quotes

It’s important to compare quotes across the market to be sure you’re getting the best coverage for your circumstances. Best Insurance have made a career out of finding our customers the best policy for their needs; we talk you through your options and guide you all the way up to purchase, so you can be sure your critical illness coverage is tailored with you in mind.

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Conditions Covered and Not Covered by Critical Illness Cover

Critical illness cover typically includes major health conditions such as cancer, stroke, heart attacks, Multiple Sclerosis (MS), limb loss, and loss of senses. Some policies may also extend to illnesses like Parkinson’s disease, kidney failure, liver failure, major organ transplants, and advanced respiratory failure. The exact list varies depending on the insurer, so it’s always best to review your policy wording or consult your provider for a complete breakdown.

On the other hand, critical illness cover generally excludes pre-existing conditions—any illness or injury you had symptoms of or received treatment for before taking out the policy. Non-invasive cancers, early-stage illnesses, abnormally high blood pressure, or injuries such as broken bones are also not covered, since most policies only apply to very serious conditions. Additionally, illnesses caused by lifestyle factors like smoking or engaging in dangerous activities may not qualify for a payout.

Things to Consider Before Buying Critical Illness Cover

Several factors can affect how much your income protection insurance costs, including:

There are multiple things you should consider before buying critical illness cover, including:

Policy terms & exclusions: Make sure you understand how the policy works; what events will allow you to make a valid claim, if there’s any limitations on cover (for example illness severity), your payout amount, and the length of your policy term.
Coverage levels: Before you purchase your critical illness coverage, you should make note of what illnesses are included in your critical illness cover and what ones are not. Then, decide whether or not you’re happy with that cover; if not, you should search the market for coverage that suits you.
Single vs. joint coverage for couples: If you’re married or have a long-term partner, a joint critical illness policy is a good, inexpensive way to cover two breadwinners. However, under joint critical illness coverage, you can only claim for one partner’s illness, not both. Consider what works best for your individual circumstances before purchase.

If you want an accurate estimate for what an income protection policy tailored to you might cost, it’s worth contacting a broker directly. You can give Best Insurance a call on 0330 330 9465 to get a quote today!

Comparisons

	Critical Illness Cover	Life Insurance
Terminal Illness Benefit (lump-sum payment on diagnosis of terminal illness)	Yes	Yes
Critical Illness Benefit (lump-sum payment on diagnosis of specified critical illness)	No	Yes
Death Benefit (lump-sum payment on death)	No	Yes
Total Permanent Disability	Yes	No

Eligibility Criteria for Income Protection Insurance

Life insurance protects your family if you pass away, while critical illness cover protects you if you’re diagnosed with a serious illness.

Life insurance provides a lump-sum payout to help with funeral costs, mortgage payments, and other family expenses.

Critical illness cover pays out directly to you, helping with medical expenses, home adjustments, or lifestyle changes while you’re alive.

Together, they safeguard both your loved ones’ future and your own financial stability during illness.

Combining the two ensures peace of mind, knowing you and your family are protected no matter what happens.

Frequently Asked Questions

What does income protection insurance cover?

Your income protection insurance policy covers your income if you’re too sick or injured to work or if you’ve been made involuntarily unemployed. You agree on an amount you’d like to be paid if this happens — called a ‘benefit’ or ‘benefit amount’ — and if you find yourself unable to work, you make a claim. Your benefit will cover whatever you need it to cover, whether that’s your mortgage payments, your rent, your bills, or even your groceries.

How much income will I receive if I claim on my income protection insurance policy?

If you successfully make a claim on your income protection insurance policy, you’ll be paid out the benefit amount you selected when you first purchased cover. This will usually be up to either 65% of your income or £2,500.

Is income protection insurance worth it if I’m in the UK?

Yes, income protection insurance is worth the investment, even if you are in the UK. With an income protection insurance policy in your back pocket, you won’t have to rely on your savings, state benefits like Universal Credit (which often aren’t enough to live off of for long), or handouts from loved ones to keep your head above water in the event that you couldn’t work. Think of it like paying into your rainy-day fund; one day, you’ll need it.

Is critical illness cover worth it in the UK?

Critical illness cover is very much worth it if you live in the UK. If you’re diagnosed with a severe illness, your critical illness cover will pay out a tax-free lump sum to you, which can be used however you like. In the UK, that might mean seeking treatments that aren’t available on the NHS – or it might mean paying mortgage or rent instalments while you can’t work. No one in the UK is immune to all critical illnesses, which is why critical illness cover is so vital.

Can I get critical illness cover with a pre-existing condition?

Pre-existing conditions tend to complicate most insurance policies, but yes, you can get critical illness cover even if you have a pre-existing condition. However, usually, your pre-existing condition won’t be included in your coverage; that means that if, say, you took out a policy while suffering from cancer, you wouldn’t then be able to make a claim for cancer.

Do I have to pay tax on my critical illness cover payout?

You’ll never pay tax on a critical illness cover payout. All payouts are always tax-free.

What’s the difference between critical illness cover and income protection insurance?

While both critical illness cover and income protection were designed to protect policyholders in the event of illness, income protection insurance is generally a much more long-term kind of policy; you can claim multiple times for multiple different illnesses, for example, whereas you can only claim on a critical illness policy once.
A successful claim under critical illness coverage will pay out one tax-free lump sum, while an income protection insurance claim will pay you a monthly benefit until you return to work. Income protection insurance also has a much wider scope than critical illness cover; on an income protection insurance policy, you could claim for illness, injury, or involuntary redundancy, whereas a critical illness policy will only pay out a successful claim in the event of diagnosis with a serious illness.
Both types of insurance are invaluable, though; doubling up on the two is a great idea if you’re interested in protecting yourself against as many possibilities as possible.

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