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Critical Illness Cover Explained

Updated: Mar 15

Have you ever considered how you and your family would manage during difficult times if illness stopped you from working? Critical Illness Cover takes away the financial stress that often comes with this, so that you can focus on making a full recovery. Whether you are buying for the first time, moving onto your next home or simply remortgaging, critical illness insurance is something worth considering now as it will offer you peace of mind should life throw an unexpected surprises.


Here we aim to explain what critical illness cover is all about, how it works, and why it's such an important form of insurance for any homeowner. With these details at hand, you can make an informed decision that gives you peace of mind knowing that, if disaster strikes, you’re covered!

Reasons To Consider Critical Illness Cover

Critical illness cover is a type of life insurance that provides crucial protection in the event of serious illness or injury.


If you're diagnosed with an illness covered by your policy, you'll typically receive a tax-free lump sum payment. The great thing is, you have the freedom to use the money however you need it. This payout can make a significant difference in your life, helping you navigate through the challenges and financial uncertainties caused by the illness. For instance, you could use the money to:

  • Settle your mortgage

  • Replace lost earnings

  • Make necessary adjustments to your home

  • Provide vital financial support to your dependents

With critical illness cover, you can enjoy peace of mind knowing that you have a safety net to protect you and your loved ones when you need it the most.


But won’t Income Protection cover me in exactly the same way?

No, although Income Protection is another important consideration, providing vital support should you ever be unable to work due to illness or injury. It's designed to replace your income, ensuring financial stability during challenging times. For a comprehensive overview, visit our page Why Income Protection Is Crucial For Homeowners.


On the other hand, Critical Illness Cover offers a tax-free lump sum payout in the unfortunate event of a severe illness or injury. It provides added peace of mind and helps safeguard you and your loved ones.


What illnesses are covered?

Critical illness insurance covers a range of conditions, but the specifics may vary based on your policy. Commonly covered conditions include heart attacks, strokes, non-terminal cancer, multiple sclerosis (MS), and Parkinson's. Additionally, if you experience physical disability due to an injury, such as a serious accident, you may also be eligible for coverage. It's important to carefully review your policy to understand the extent of your coverage. Rest assured, having critical illness insurance provides valuable protection and peace of mind.


When Critical Illness Cover Won’t Pay Out

Critical Illness Cover may not cover certain situations, such as:

  • If you are diagnosed with a critical illness after your policy term ends

  • If you pass away shortly after being diagnosed (your life insurance will cover this)

  • If you are diagnosed with a critical illness that is not listed in your policy

  • If you are diagnosed with a terminal illness (again, your life insurance may cover this)

  • If you stop paying your premiums.

What factors affect the price of critical illness cover?

The price of your critical illness cover is determined by several factors, including:

  • Your age

  • The level of coverage you require

  • Your overall health and lifestyle choices, such as smoking and alcohol consumption

  • Any existing medical conditions you may have

  • Your current personal circumstances

  • The desired term of your policy

Why are some policies more expensive than others?

Premiums for Critical Illness Cover can vary between insurance providers, as some offer coverage for a wider range of illnesses. Moreover, certain providers may include value-added features, like GP Services, giving you access to a range of extra benefits. It's crucial to consider these factors when selecting your critical illness cover. The key is to pay what you can comfortably afford. When it comes to protecting something as important as yourself, particularly when selecting your Critical Illness Cover, opting for the cheapest policy could end up being a costly decision in the long run.


Advantages of not 'putting things off'

If you're young, fit, and healthy, you're probably wondering if now is the right time to get Critical Illness Cover. Well, rest assured, it absolutely is and here's why:

  • Age plays a significant role in determining the cost. The younger you are, the more affordable the premium

  • Getting cover is generally a breeze when you're in good health and free from any medical conditions

Now, let's turn those around and say you're five years older and now have a couple of ailments. Combining these factors can make Critical Illness Cover expensive and potentially unaffordable. In some instances you may not be offered any cover at all.


So, don't wait any longer, protect yourself with Critical Illness Cover while you’re at your best!


Can I take Critical Illness Cover out later?

We all know that getting critical illness cover when you're young, fit, and healthy is the smart move. But if you're thinking of putting it off, let's talk about whether you can afford to do so. According to the Office of National Statistics (ONS):

  • over 2.5 million people in 2023 were economically inactive due to long-term illness

  • The number of working-age individuals living with a major illness is on the rise, hitting 36% in the first quarter of 2023, up from 31% in 2019 and 29% in 2016

  • Critical illness insurance typically covers serious, long-term conditions. And as the below stats indicate, the chances of developing such conditions can be high

Critical illness insurance covers long-term, serious conditions. And the figures speak for themselves, reflecting the high likelihood of developing a severe health condition:

  • A staggering 7.6 million people in the UK are living with heart and circulatory diseases

  • There are 1.3 million stroke survivors in the UK

  • Shockingly, one in two people in the UK will develop some form of cancer in their lifetime


Ways To Reduce Costs and Optimise Your Coverage

To reduce the cost of critical illness cover, here are a few practical steps you can take:

  • Begin coverage early, so while you're young, fit, and healthy as this can make a significant difference

  • Consider 'decreasing' cover instead of level cover. Just like life insurance, you can choose a plan that reduces each year, which is commonly used to protect a repayment mortgage. Level cover tends to be more expensive

  • Partial protection is better than none at all! Whilst it is recommended to protect your entire mortgage, having some of it covered is a good approach if you are looking to reduce costs

  • Consider a plan that covers essential illnesses only but may not offer coverage in other areas

It's always important to evaluate your needs and priorities. By following these considerations, you can make critical illness cover more affordable without compromising too much with your protection.


The Value of Working with a Mortgage Protection Advisor

Choosing the right critical illness cover is crucial. Remember, insurance policies are unique and may not cover the same conditions or illnesses.


By working with a Mortgage Protection Advisor, you can simplify this process. They will help you understand your options and provide an initial estimate of costs. Whether it's considering budget-friendly choices or enhanced critical illness cover, your adviser will ensure you receive the right cover while respecting your preferred budget.



In conclusion, it is essential that we all consider our own well-being now before health issues arise. Taking out Critical Illness Cover can help reduce the financial anxiety and worry that may impact on your recovery, while also giving you peace of mind in the horrible event that illness strikes. It’s a small step to protect your independence and security in the future. Even when life throws you a curveball, you can rest assured that your mortgage payments will keep on ticking over.


Ready to consider some critical illness cover? At Beechwood Mortgages, we help our clients find the cover that best fits their needs with ease. So Get in Touch now to organise your personalised Critical Illness Cover review.


As with all insurance policies, conditions and exclusions may apply.


Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.

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