Critical illness cover works differently from life insurance: you don't have to die to benefit. It pays out a lump sum if you're diagnosed with one of the serious illnesses listed in your policy, or undergo one of the specified surgeries.
How it pays out
Most policies pay a lump sum, though some can provide a regular income instead (as with Family Income Benefit). Cover applies only to the conditions named in your policy, so it's important to check the policy wording.
Is it right for you?
Unless you have substantial savings, critical illness cover can be valuable — particularly if you have debts such as a mortgage. It's worth thinking about the financial impact a serious illness would have, and whether you could meet those costs from savings alone.
How much cover do you need?
Consider the sums you'd need in different scenarios, such as paying off the mortgage or adapting your home. Your premium will depend on factors like your age, health, occupation, smoking status, and the type, amount and length of cover. Your family's health history can also affect the premium, or lead to certain conditions being excluded.
Combined policies
Some policies combine critical illness with life cover. It's worth taking care here, as life cover can sometimes end once a critical illness claim is paid. Total and permanent disability cover may also be available as an option.
Important — please note
This article is general guidance, not personal advice. Cover, terms, limits and exclusions vary between policies and insurers, so always check the policy wording. Premiums depend on your individual circumstances.
For a recommendation based on your own situation, please get in touch.