What is life critical illness cover?

Life critical illness cover is a combination of two different forms of insurance, mixing the obvious benefits of life insurance and critical illness cover into one policy.

Life critical illness cover will provide your family with a financial lump sum payment, in the case of the customer either being diagnosed with a critical illness, or dying.

Why do I need life critical illness cover?

Life critical illness cover is important to any potential customer with financial responsibilities. These can include children, or a mortgage, and in many cases include both. The important question to ask at this point is how would my family cope financially if I was unable to earn money anymore. In many cases the answer is they wouldn’t and would have to move home.

How does life critical illness cover work?

Life critical illness cover is a mix of two different policies. The life insurance part of the policy will pay out a lump sum to the customer’s family in the event of the customer’s death. That lump sum can then be used to pay off a mortgage, guaranteeing the family somewhere to live, and to pay for child care, school and university fees, or any other costs associated with children.

The critical illness cover side of the policy works in a similar way. Should a customer be diagnosed with a critical illness, and they survive the survival period, which is usually around a month from first diagnosis of the illness, but will vary from insurer to insurer, they will receive a lump sum payment.

Critical illnesses are slightly different to death in that you will carry on receiving sick pay for a period in many cases, and could potentially return to earning again. For this reason payouts are usually smaller, and in some situations can just be used to pay for private medical care, or for a relaxing recovery holiday if the patient recovers before their sick pay runs out.

In many cases, a critical illness does last a long time, and can often prevent someone from going back to work in the format they were working before. The money in these situations is used to top up pay lost, or to make up the difference commission or regular bonuses would have had on a pay packer.