Critical Illness Insurance

A serious illness can bring large costs and lost income, even if the person survives. Critical illness insurance provides a lump sum that can be used for anything, such as paying off a mortgage, covering living costs during treatment, adapting a home or paying for private care.

Each policy lists the conditions it covers and defines them precisely, often including how severe the illness must be. Common conditions include specified cancers, heart attack, stroke, multiple sclerosis and major organ failure.

For example, someone diagnosed with a covered cancer might receive 100,000, allowing them to take time off work during treatment without worrying about their mortgage payments.

Critical illness cover is common in the United Kingdom, Australia, Canada and parts of Asia, often bought alongside life insurance. It differs from income protection, which pays a regular income while someone cannot work, and from health insurance, which pays medical bills. Claims can be refused if a condition does not meet the policy’s definition or if health information was not disclosed when buying, so reading the definitions carefully matters.