What is critical illness cover and why do I need it?
As the age old saying goes, ‘you never know what’s around the corner’. Serious health challenges can affect anyone, of any age, at any time. If your income is of significant importance or your family depends on you financially, critical illness cover can provide a reassuring safety net. It offers vital financial support during difficult times when you may not be able to work or fulfil your usual responsibilities, helping you and your loved ones focus on what matters most.
What is the purpose of critical illness insurance?
As the name suggests, critical illness cover is an insurance policy that pays out money in the event you are diagnosed with a specific serious illness or medical condition that’s listed in your policy documents.
Unlike life insurance, which pays out upon death, critical illness cover provides a tax-free lump sum whilst you are still alive, helping you manage the financial impact of a serious health condition.
What does critical illness cover protect against?
Most policies cover major conditions including:
- Cancer
- Heart attack
- Stroke
- Multiple sclerosis
- Organ failure requiring transplant
- Parkinson’s disease
- Major organ transplant
The exact illnesses covered vary between providers and individual policies, but these core conditions are typically included.
Why critical illness cover matters
According to Cancer Research, approximately 385,000 new cancer cases are diagnosed annually in the UK (correct as of April 2025). Meanwhile, the British Heart Foundation reports that every five minutes, someone is admitted to a UK hospital with a heart attack. Despite these statistics, many working professionals and people with dependents remain underinsured against such risks.
For single professionals:
If you’re single, you likely depend entirely on your income to maintain your standard of living. A critical illness diagnosis could mean:
- Extended time away from work with reduced or no income
- Inability to cover rent or mortgage payments
- Struggling to meet basic living expenses
- Potential need to adapt your home for accessibility
Without a partner’s income to fall back on, single individuals are particularly vulnerable to financial hardship following a serious diagnosis. Critical illness cover provides that crucial safety net, allowing you to focus on recovery rather than financial worries.
For families:
For those with dependents, the financial implications of a critical illness extend beyond personal needs:
- Children’s education and daily expenses continue regardless of your health
- Your partner may need to reduce working hours to care for you
- Additional childcare costs might be required
- Family holidays and activities may become unaffordable
A critical illness diagnosis can dramatically alter family dynamics. The lump sum payment from critical illness cover helps maintain financial stability during an already stressful time, protecting your family’s lifestyle and future.
Children’s critical illness cover
With some critical illness policies, you can also opt to cover your children. Most policies will cover children from birth to 22 or 23 years old, if in full time education and cover typically includes the standard illnesses but additionally, total permanent disability and terminal illness may also be available.
For mortgage holders:
A mortgage is likely your largest financial commitment. A serious illness could threaten your ability to keep up with mortgage payments:
- Mortgage payments continue regardless of your health status
- Statutory Sick Pay is limited to £118.75 per week (as of April 2025) for up to 28 weeks. Is that enough to cover your financial commitments?
- Employment and Support Allowance offers minimal financial support
- Losing your home during medical treatment adds unnecessary stress
Critical illness cover can be specifically designed to cover your mortgage balance, ensuring your home remains secure while you recover. Many mortgage advisors now recommend critical illness cover alongside life insurance when arranging mortgages.
How much cover do you need?
The appropriate level of cover depends on your circumstances. Typically clients should aim for 2/3 times their salary and things to consider include:
- Single professionals should consider covering living expenses for at least 12-24 months
- Families might need additional coverage for childcare and education
- Consider additional funds for potential treatment costs, home modifications, or rehabilitation
The cost of protection
Premiums of critical illness cover vary based on age, health status and family medical history, smoking status, policy coverage (number of conditions included), and coverage amount.
How to obtain Critical Illness Cover
Just like people, critical illness policies can be bespoke to suit individual needs. To find the most suitable policy for your needs, employing an adviser for tailored and personal advice can make all the difference.
At LDN Finance, we are a multi-award-winning property finance brokerage therefor understand how important it is to have protection insurance in place. Our advisers will listen to your unique personal and financial circumstances before scouring our extensive network of insurers and underwriters for the most suitable critical illness plans.
Working with you, we will help you to decide upon the types of critical illness conditions you want to cover, and how many years you want the policy for.
In the event that you are unable to work due to critical illness, how will you cover your income or any additional expenses incurred during illness? By having a critical illness policy in place, you have peace of mind that financial stability is close by when you need it most.
For professionals at any life stage – single, with family, or with mortgage commitments – critical illness cover represents an essential component of comprehensive long-term financial planning.
Get in touch with LDN Finance today and see how our advisers can help you.