Protecting your lifestyle

Covering the costs that result from a serious illness
Critical illness insurance can help you and your family cover the costs that may result from a serious illness, including medical expenses, moving house and protecting your business. You receive a tax-free lump sum if you are diagnosed as having one of the specific life-threatening conditions defined in the policy and it is up to you how you use the money.

Policies often offer combined life and critical illness cover. These pay out if you are diagnosed with a specified critical illness, or you die, whichever happens first.

No single policy will cover all critical conditions, which is why, we believe, it is important to receive professional advice. Industry guidelines say that, to call itself critical illness insurance, a policy must offer cover for: cancer, but only advanced cases; heart attack if sufficiently severe; and stroke if it results in permanent symptoms. However, there are differences between the definitions provided even on these.

In practice, most policies cover more critical conditions than just these three. A basic plan will typically also cover coronary bypass surgery, kidney failure, major organ transplants and multiple sclerosis.

A more comprehensive policy will cover many more serious conditions, including loss of sight, permanent loss of hearing and a total and permanent disability that stops you from working. Some policies also provide cover against the loss of a limb.