News and Articles

Critical illness cover – your questions answered

By | Insurance | No Comments

This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincoln or other local offices.

The main purpose of critical illness cover (CIC) is to release a much-needed lump sum to you and your family should you be diagnosed with a predefined illness or condition. With COVID-19 currently high on people’s minds, questions around CIC have come into the spotlight again in 2020. Here at Castlegate, our financial advisers in Grantham wanted to offer this short guide on answers to commonly-asked questions surrounding CIC.

We hope this provides more of the information you need. If you would like to discuss any of these matters or talk through your own financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:

01476 591022

Which conditions does critical illness cover apply to, and does it cover COVID-19?

Critical illnesses under CIC policies usually encompass conditions and illnesses such as strokes, heart attacks and loss of limbs. In certain cases, specific cancers may also fall under the terms of the policy. COVID-19, unfortunately, does not count as a critical illness. This is according to the latest ABI Guide to Minimum Standards for Critical Illness Cover

Is critical illness cover the same as terminal illness insurance?

These two types of financial protection are quite similar. Yet the main difference lies in the list of illnesses, disabilities and conditions that each one tends to cover. For a terminal illness policy, the list will usually comprise those which reasonably imply a survival period of no longer than 12 months (following diagnosis).

Is there a difference between CIC and long-term care insurance?

Yes. Long-term care insurance is not designed to provide one lump sum if you are diagnosed with a particular health condition. Rather, it intends to supply a monthly payment to cover the costs of your long-term care. These might include the cost of a residential home, a caregiver or health care provider.

Is critical illness cover really necessary if I already have life insurance?

Life insurance and CIC are intended to cover you in different scenarios. It is possible, of course, that you may be diagnosed with a life-altering illness which affects your quality of life and ability to work, perhaps for decades. In which case, a life insurance policy may not be much help. If you also have a suitable CIC policy, however, you can access extra financial support.

Why do I need professional financial advice to set up a CIC policy – can’t I do it myself?

It is perfectly possible to set up a CIC policy on your own. Yet it’s important to note that, given the high stakes involved, getting financial advice can ensure you get the best deal possible and cover all of the necessary bases. It is not unheard of, for instance, that people take out a CIC policy which does not cover the illness/condition they are diagnosed with later.

Others pay more than is necessary for a policy which does not cover as much as it could. A financial adviser can draw upon their experience with these policies and their knowledge of the market to help you find the best CIC policy for your needs.

Should I get CIC for my children?

This is a great question and it is, in fact, possible to find CIC providers who offer policies for children. The suitability of these policies, however, does depend on your unique circumstances and the range of policies on offer. It is a good idea to discuss your options with a financial adviser, since there might be other avenues available which may be more appropriate.

Do all CIC policies cover all possible types of cancer?

No, they do not. This is where it can pay to get professional advice, since there are certain types of cancer which may not fall under the terms of a policy which you are considering. Many early stage cancers (e.g. breast cancer) and non-malignant tumors will likely not be covered.

What do I do if my CIC has expired?

You can, of course, simply renew your existing policy. Yet it may be a good idea to survey the wider market to see if there are better, more cost-effective alternatives. This will be necessary anyway if your policy does not have a renewal option.

Should I still consider CIC if I have health insurance?

Having private medical insurance (e.g. through your employer) can be a huge financial support when recovering from an illness or condition which takes you out of work. Yet, whilst many of your hospital expenses will likely be covered, your lost income will not be covered. Here, the lump sum from a CIC policy can help to plug some of the financial gaps, perhaps even allowing you to pay off your mortgage to ease the strain on your monthly finances.

Can I get CIC if I’ve already been diagnosed?

Realistically, your chances of getting cover once you have already been diagnosed are quite slim. This should provide some urgency to discuss the matter with a financial adviser as soon as possible, rather than putting off the matter until it is possibly too late. If you are in this position, get in touch with us to discuss your options with a financial adviser here at Castlegate.


If you are interested in discussing your own financial plan or protection strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

01476 591022