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Critical illness cover explained
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A critical illness insurance policy might cover a range of conditions. If you’re diagnosed with one of these during the life of your policy, you could receive a lump sum. This is to help pay for different life expenses. No-one hopes to be unwell, but financial support could relieve at least one pressure at a difficult time.
Policies can differ depending on several factors. For example, how long you want the cover to last, how much you’d like to claim for, and the cost of premiums. Factors like your age and health at the time you take the policy out can affect the cost.
Some people may want to use critical illness insurance to cover the following:
- Living costs while out of work.
- Covering a partner’s income.
- Childcare.
- Mortgage payments.
- Travel to and from hospital visits.
- Specialist or additional treatment.
- Medicine and prescriptions.
- Utility bills.
- Changes to your property, such as wheelchair access.
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A critical illness policy does not cover all forms of illness. If your condition is listed within your policy, you will receive a payout if you survive for at least 7 days after diagnosis.
Insurers may differ in what they include, but 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.
Standard critical illness policies may cover other conditions and ailments. Or, they might be included in more comprehensive enhanced cover options depending on the insurer.
There may be circumstances where a claim might not be successful, even if your diagnosis is covered by your policy. It’s important to be 100% honest during your application. Insurers will refer to your GP for confirmation of diagnosis. They’ll also check if the condition was known previously.
Make sure you check all policy details before you choose and purchase the cover that’s right for you.
More about Lloyds Bank critical illness cover.
It’s worth remembering that life insurance and critical illness cover products have no cash in value at any time. If no valid claim is made by the end of the policy term, it will end. Which means you’ll get nothing back.
If you don’t pay your premiums on time your cover will stop. This means your policy will end and you’ll get nothing back.
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The price of your policy will depend on:
- Your age.
- Your health.
- Your lifestyle.
- The policy duration.
- The level of cover you need.
The more likely you are to get an illness the more you can expect to pay for your cover. But you are also more likely to make a claim.
Critical illness cover usually involves a fixed monthly premium that doesn’t change, which can help with budgeting. Think about what costs you’d need to cover should you fall ill. It’s also worth considering what your family would need to maintain their current lifestyle.
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Getting critical illness cover might not be for everyone. It’s important to think about how you’d manage your finances if you fall ill.
You may consider getting critical illness cover if:
- You’re the main or sole breadwinner for you and your loved ones.
- You don’t have enough in savings to cover costs while you can’t work.
- You don’t have an employee benefits package, such as long-term illness cover.
- You only receive statutory sick pay.
Critical illness insurance acts as a lifeline if you have dependants or a partner who can’t cover all your monthly expenses alone.
You may also like to consider taking out a life insurance policy. This could give a financial benefit to your loved ones if you were to die unexpectedly.
At Lloyds Bank, you can purchase life and critical illness insurance together or separately, securing the cover you need. Scottish Widows – who are also part of Lloyds Banking Group – arrange our life insurance policies. They are our life insurance experts, helping to protect what matters most for over 200 years. To qualify for critical illness or life cover, you must be a UK resident between the ages of 18 and 59.
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You may have come across another type of policy called life insurance. This also gives financial protection for your loved ones, but with some important differences:
- Critical illness policies cover the diagnosis of a critical illness listed on your policy. Life insurance only covers your death.
- A successful claim on a critical illness policy would result in the policyholder receiving a cash lump sum. It’s then up to them to allocate or spend as they want to. Life insurance however involves a payout being made after the death of the policyholder. The cash lump sum goes to either a joint policyholder or the executor/s of the will. If the life insurance policy has been placed in trust, its trustees or beneficiaries will receive the payout.
- Life insurance policies may form part of your estate. This means that in the event of your death, they could be subject to tax.
No-one likes the thought of passing away or leaving their loved ones alone. Life insurance could help to make sure they’re provided for financially in the event you can’t be there.
Let’s look at the details
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With critical illness cover, you’ll only receive a payout if your consultant medical professional diagnoses you with a condition that is listed in your policy. That means you wouldn’t be able to claim if the illness wasn’t included in your policy. What’s more, critical illness insurance relates to your health when you are alive, so doesn’t cover your death. Also, in most cases you'll need to live for a minimum of 7 days after diagnosis.
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Many insurers won't cover any pre-existing medical conditions. You may still be able to take out a critical illness policy, but your existing diagnosis would be excluded. This meaning you wouldn’t be able to claim for that illness or condition.
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Every critical illness policy is different and child cover isn’t always included or can be added as extra. It’s a good idea to decide on what you need and then talk to your provider. Make sure to read the terms and conditions of a policy to see whether it covers children. You can see conditions they are covered for and until what age.