Understanding Critical Illness Cover

You can never be sure of what might be round the corner & that's where Critical Illness Cover may be able to help take away another stressor that life throws you.

Critical Illness Cover is often discussed at the same time as Life Assurance, so it could be forgiven for thinking that they were one in the same. In reality, you can have Life Assurance without Critical Illness Cover and vice versa.

HOW IT WORKS

You pay regular premiums to an insurer, and if you’re diagnosed with a covered illness (check the policy’s list—each insurer varies), you receive a lump sum. Policies typically cover 30-50 serious conditions, with some offering partial payouts for less severe diagnoses. You can use the payout however you see fit—whether to clear your mortgage, cover lost income, or fund treatment.

The cost depends on factors like your age, health, lifestyle (e.g., smoking), and the cover amount. For example, a 30-year-old non-smoker might pay £20-£40 monthly for £100,000 of cover. Starting early often means lower premiums, as insurers see younger, healthier clients as lower risk.

WHY IT MATTERS FOR MORTGAGE HOLDERS

When you take out a mortgage, you’re committing to years of repayments. But what happens if a critical illness stops you from working? Bills don’t pause, and neither do mortgage payments. Critical Illness Cover can provide a lump sum to:

• Cover Mortgage Payments: Pay off part or all of your mortgage, reducing financial stress.

  
  

• Support Living Costs: Cover bills, childcare, or medical expenses while you recover.

  
  

• Adapt Your Home: Fund modifications, like wheelchair access, if needed.

  
  

• Give Peace of Mind: Focus on recovery without worrying about finances.

  
  

As brokers, we’ve seen how this cover brings security to clients, especially young families or self-employed buyers who rely heavily on their income.