Is Critical Illness Cover Worth It?

If you take out Life Insurance or Decreasing Life Insurance, you can choose to add Critical Illness Cover for an extra cost. Depending on your circumstances, that cost could be quite significant. But what exactly is the benefit of critical illness cover? This article outlines some of the benefits and considerations you should take into account to help you make an informed decision.

What does Critical Illness Cover offer?

Critical Illness Cover from Legal & General is designed to protect you and your loved ones from the financial impact of a critical illness. It could pay out a cash sum if you’re diagnosed with, or undergo a medical procedure for one of the specified critical illnesses we cover during the length of your policy and you survive for 14 days from diagnosis. It could help pay for things like household bills, childcare costs or simply help maintain a reasonable standard of living for you and your family if you have to take time off work to recover. You may find more information in our Critical Illness Cover FAQs.

Critical Illness Cover pros and cons

To help you decide whether you need critical illness cover, we’ve summarised some of the key pros and cons below.

Benefits of Critical Illness Cover

  • The tax-free pay out could help cover your mortgage, rent or other expenses such as medical bills if you’re unable to work due to a critical illness.
  • You’ll be covered for a wide range of illnesses, giving you peace of mind.
  • You can decide how you want to spend the cash sum – from clearing debts to adapting your home.

Downsides of Critical Illness Cover?

  • Your policy has no cash value unless a valid claim is made, so even if you survive the policy, you won’t get any money back. Legal & General Critical Illness Cover does not pay out on death.
  • Not every illness is protected under critical illness cover; for example, some types of cancer are not included.
  • If you stop paying your premiums, your cover will end 30 days after the first missed premium.

Do I  need Critical Illness Cover?

A critical illness can affect anyone at any age and can turn lives upside down. In the event of being unable to work due to critical illness, having a back-up plan in place can alleviate some of the financial stress of the situation. Some people may use their savings to supplement their loss of income; others may rely on an employment benefit package, while others may find that Critical Illness Cover is one of their best options if they need a cash sum.  

How much Critical Illness Cover do I need?

If you decide that you need critical illness cover, you should consider your personal circumstances, how much you can afford to pay in premiums each month and how long you’re prepared to pay for it. None of us know when we might become critically ill, so by taking out life insurance and critical illness cover, you’re paying for peace of mind of knowing that should the worst happen, you’ll be covered.

How much does Critical Illness Cover cost?

The amount you pay can vary widely from person to person, so to get an idea of how much you could be paying, its best to get a quote. These are some of the factors that will determine your premium:

  • whether or not you smoke, or have previously smoked in the last 12 months
  • your age
  • how much cover you want and how long you need it to last
  • your health and lifestyle, including your weight and family medical history
  • your job - some occupations are seen as higher risk and therefore can have higher premiums associated 

The difference between Life Insurance and Critical Illness Cover

The essential difference between life insurance and critical illness cover is that the former provides financial protection in the event of your death during the length of your policy, while the latter can help minimise the financial impact on you and your family if you become critically ill. You might take out a life insurance policy and add critical illness cover for an extra cost, though with Legal & General you cannot choose to add critical illness cover at a later date. Here are some other differences between life insurance and critical illness cover:

  • Control of funds – Life Insurance usually pays out to your loved ones, giving them control of how to use the money when a valid claim is made. With Critical Illness Cover, you would receive the cash sum and can decide how best to use it.
  • The payout – both life insurance and critical illness cover pay out a cash sum if a valid claim is made during the length of the policy. The cash sum can help minimise the financial impact on your loved ones, from the mortgage to household bills, if you were to die or be diagnosed with a specified critical illness.
  • Children's Critical Illness Cover – this is included automatically with our Critical Illness Cover and offers some financial protection if your children become critically ill, which is not offered as part of our standard Life Insurance policy. Terms and conditions apply.

You just need to remember that these policies are not savings and investment plans and have no cash value unless a valid claim is made.

Our Critical Illness Cover

When you’re in good health, it may be hard to imagine that critical illness cover could be needed one day. Both life insurance and critical illness cover can help to protect you and your loved ones when you need it most.