6.2 Protect Your Health and Wealth: A Guide to Critical Illness Insurance
How to protect yourself and your loved ones if you are hit with a serious diagnosis
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Freedom isn’t just about building assets — it’s about protecting them.
Critical Illness Cover is one of the key shields that guards your escape plan if life throws a serious challenge your way.
Imagine being diagnosed at 45, unable to work, with a mortgage still to pay.
What is a Critical Illness?
The three core conditions that must be covered by all critical illness insurance policies are:
Cancer (of a specified severity)
Heart Attack (of a specified severity)
Stroke (resulting in permanent symptoms)
Additionally, insurers may also offer coverage (but are not required to) for further conditions such as1:
Coronary artery bypass grafts
Kidney failure
Major organ transplant
Multiple sclerosis
Motor neurone disease
Parkinson’s disease
Benign brain tumour
Blindness
Deafness
Loss of speech
Loss of limbs
Traumatic head injury
Third-degree burns
Each of these conditions has a minimum definition that must be met if included in the policy, to ensure consistency and clarity.
What does a Critical Illness Policy do?
If you are diagnosed with any of the above, and survive a defined period of time from the diagnosis (e.g 14 days), the policy pays out a lump sum.
How long does a policy last for?
Most are defined for a set term (5, 10, 30 years). If you are not diagnosed within that period, the policy expires.
How many times can you claim?
You can generally only claim once on any policy, after which it will be terminated.
Can I Buy Life Insurance and Critical Illness Insurance Together?
Yes. This can be done in two ways:
1. Accelerated Cover
If you make a claim on the critical illness part, it pays out, and the cover ceases. It will not pay out after that if you die.
If you die first, without having claimed on critical illness cover, it will pay out on the life insurance part.
It is possible to “buy back” the life insurance part once you make a critical illness claim
2. Additional Cover
The policy pays out on critical illness & death. This is normally more expensive.
How Much Cover Do I Need?
This is a question only you can answer - a session with a regulated financial advisor may be able to help with what cover you need.
You may want to pay off any large debts for peace of mind (mortgage, school fees), since your capacity to earn income may be affected.
However a policy covering that amount may be too expensive.
A compromise of coverage of 3-5 years of expenses may work. This gives you a chance to recover from your illness, and for other insurance policies could to supplement it (income protection insurance).
Where Can I buy Critical Illness cover?
In much the same place as life insurance - online through comparison sites, or through individual insurers.
An insurance broker may be able to source better deals (much the same as a mortgage broker).
And that’s really all there is. Having a plan doesn't remove all uncertainty — but it gives you back control over what happens next.
Up Next: Income Protection Insurance
How to continue receiving an income even if you cannot work
https://www.abi.org.uk/globalassets/files/publications/public/health/abi_bro4965_critical_illness_guide_v4.pdf
Disclaimer: This content is for informational and educational purposes only. It does not constitute personal financial advice. Everyone’s situation is different — if in doubt, speak to a qualified, regulated financial adviser.