Find the answers to some of the most frequently asked questions about critical illness protection.
How is critical illness insurance different from life insurance?
In the UK, NHS care is available for many illnesses. Whilst medical treatment may not cost you upon diagnosis of a serious illness, other costs must be taken care of whilst you recover. Critical illness cover provides a financial safety net for lost income.
Life insurance pays out if you pass away, where critical illness cover pays out if you are unable to work due to serious illness. Critical illness cover will not pay-out if you pass away.
What illnesses are typically covered?
The illnesses covered by Critical Illness protection will vary by provider. Some exceptions may also exist within illness categories. It is important to check the details of the policy, before taking it out.
Examples of illnesses typically covered by Critical Illness protection include:
Cancer (specific types and stages)
Heart attack
Stroke
Multiple sclerosis
Some organ transplants
Parkinson’s disease
Dementia including Alzheimer’s disease
It is essential to always read the policy wording for the exact definitions and conditions.
How much does critical illness cover pay out?
The tax-free pay-out you will receive is determined prior to taking out the policy. The amount you will require in pay-out is one of the determining factors in how much your monthly premiums will be. The Bell Mortgage Solutions team will work with you to determine your requirements.
What can I use the pay-out for?
Once you have made a successful claim, you will receive a tax-free lump sum. This money can be used in whatever way you require. For example, for day-to-day expenses that your income usually covers, mortgage payments, or household modifications required due to your condition.
Is the pay-out taxable?
No — critical illness pay-outs are generally tax-free in the UK.
Who should consider critical illness cover?
Critical illness cover can provide significant financial support for anyone whose income is used for day-to-day expenses. However it is particularly worth considering if you have a mortgage or dependents, to ease potential financial burdens associated with your serious illness. Those who are self-employed or whose employer does not offer sick pay benefits, should also consider this form of protection.
What affects the cost of cover?
Many factors can impact the cost of your monthly premiums for critical illness protection. This can include your age, whether you smoke now or in the past and your medical history. Your family’s medical history may also be taken into consideration with certain conditions. The level of cover and term length you require will also have an impact on the amount you pay each month. It is essential that you are honest about any existing conditions, and medical history in your application. If you aren’t, this could lead to a failed claim in your time of need.
Can I get cover with a pre-existing condition?
You may still be able to take out critical illness protection if you have a pre-existing medical condition. Some conditions may lead to exclusions or higher premiums. You must be honest in your medical condition disclosure, or your policy could be invalidated.
Will I be covered if I survive but can’t work?
Critical illness cover gives you a single tax-free lump sum. It does not provide ongoing income. To ensure ongoing financial support from your cover, you should consider income protection cover. This pays out on a monthly basis whilst you are not able to work, or for the duration of the policy.
Does it cover multiple illnesses or recurring conditions?
Critical illness protection typically covers you until a pay-out is made, or for the duration of the policy. Once a pay-out is made, the policy ends. Therefore in most cases, you will not be able to claim for multiple illnesses on the same policy.
Is it worth having critical illness insurance?
Critical illness cover is worth having for those with significant financial commitments, for example a mortgage. Those with dependents may also look for the peace of mind that critical illness protection brings. The Bell Mortgage Solutions team will help you determine if this form of protection is the most suitable for your needs.
Can critical illness cover be combined with life insurance?
Yes. Many providers offer combined life and critical illness policies, which may be more cost-effective than buying them separately.
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