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. So if your budget can stretch to it, what's 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 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.

Who needs 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 does Critical Illness Cover cost?

The amount you pay can vary widely from person to person, so to get an idea of how 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 covers you for the diagnosis of a specified critical illness. You might take out a Life Insurance policy and choose to add Critical Illness Cover for an extra cost. With Legal & General, you can not buy Critical Illness Cover as a standalone policy. Here are some of the 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 pay out and can decide how best to use it.
  • The payout – life insurance is designed to pay out a cash sum in the event of your death and can help minimise the financial impact on your loved ones that are left behind. Whereas Critical Illness Cover is designed to pay out following the diagnosis of a specified critical illness, helping to alleviate some of the stress at a difficult time while you recover.
  • 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

So, there are differences between Life and Critical Illness Cover, but both can help to protect you and your loved ones when you need it most.