Critical Illness cover FAQs

1st July 2019


What is Critical Illness cover?

Critical Illness cover (also known as Critical Illness insurance) is a long term policy which covers you for a serious illness during the policy period so you don’t have to worry about your finances. Each lender has their own list of illnesses that they will cover.


How does it work?

If you are diagnosed with a serious illness, a Critical Illness policy will pay out a tax-free, one-off payment (some insurers may offer monthly instalment options also). This can help you pay for your mortgage or rent, any existing debts you may have or help you to make adjustments to your home, such as a wheelchair ramp, if you need it.


Why do Contractors need Critical Illness?

When you work for yourself, you no longer receive the same benefits as regular employees. These benefits include payment to cover a long period off work due to sickness. The alternative to receiving ‘sick pay’ is to receive state benefits, however this may not be enough to replace your income.

If you’re eligible, you may be able to receive Employment and Support Allowance (ESA) – which ranges from £70 to just over £100 a week, depending on your circumstances and the seriousness of your illness or disability. Will that be enough to cover your household bills and family’s lifestyle? If not then you should consider Critical Illness cover.


What illnesses are covered?

Each insurer has their own list of critical illnesses that they cover. Typically you’ll be insured for heart attacks, cancer (depending on the type and the stage), strokes and also permanent disabilities due to an illness or injury. If you have a specific illness that you want to be covered for, get in touch with a Contractor Protection Specialist who will be able to guide you to the right insurer.


What factors impact the policy’s cost?

There are a number of factors that can influence the cost of your monthly premium including:

  • Your age
  • The level of cover you wish to take out
  • Whether you’re a smoker or have previously smoked
  • Your current health, weight and family’s medical history
  • Your job (some occupations carry higher levels of risk than other professions and therefore may increase the monthly premiums)


What are the benefits of Critical Illness cover?

Keep a roof over your family’s head – With Critical Illness cover, you can rest assured that you will be able to keep up with mortgage repayments or even pay off the full remaining amount.

Tax-free payout – If you are diagnosed with a Critical Illness, the money you and your family receive is tax-free.

You may be able to get small multiple payouts – Most policies will only pay out once, but some insurers will make a small payment if you are diagnosed with a less severe illness. In this case, your policy would continue and you should be able to make a further claim down the line if you’re diagnosed with a more critical illness.

Gives you peace of mind – No one knows what the future has in store but with Critical Illness cover, you will be protected for a number of illnesses. This way you can rest assured that you and your family are financially secure.


How is Critical Illness different from Income Protection?

The major difference is that Income Protection is for illnesses where you are expected to make a recovery – therefore the payout is to cover you until you’re fit to return to work. Critical Illness however assumes that you’re not going to make a recovery and won’t be able to return to the same line of work (e.g. a tree surgeon who becomes wheelchair bound). The payout from Critical Illness cover helps you to look after you and your family going into the future.


How can I set up a Critical Illness policy?

When it comes to things as important as protecting our health or finances, we believe that you should receive the best advice. To set up Critical Illness cover, or if you have more questions and want to speak to an expert, get in touch.


All content is accurate at the time of publication

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