What is critical illness cover?

Critical illness cover is insurance that pays out a tax-free lump sum if:

You can make a claim if you survive for a set time after meeting the conditions of the policy. And you can use the lump sum to help with the cost of medical treatment, a mortgage or paying the bills while you’re not working.

Critical illness cover is designed to support you and your family financially, so you can focus on your treatment and recovery. It doesn’t pay out if you die - that’s where life insurance could help.

It’s also worth noting that critical illness cover isn’t a savings or investment plan. It’ll only pay out if you make a successful claim.

Critical illness insurance usually covers a range of different illnesses. For example:

You can take out critical illness cover on its own or with a life insurance policy. With Tesco Insurance you will need to buy it with a life insurance plan. You decide:

When deciding on your cover, it’s worth thinking about whether you’re paying a mortgage, childcare or other regular expenses. And who you need to support if you’re unable to work.

For level cover, you decide the cover amount and how long you want to be covered for. And you’ll pay the same monthly premium throughout the policy term.

Level cover can help you with things like living expenses while you’re off work.

You can choose to increase your cover with inflation. If you do, your monthly payment and cover will go up over time.

With decreasing cover, the value of your cover goes down over time. But your monthly premiums stay the same throughout the policy term.

Decreasing cover can help you with monthly debts that reduce over time, like a repayment mortgage.

At Tesco Insurance we only offer level cover.

51% of Brits think their loved ones would need more than £1,000 a month to cover financial costs if something happened to them, according to our research.*

Critical illness cover can help to give you peace of mind and financial support during a difficult time. Especially if you’re the main breadwinner in your household and you’re unable to work.

It’s also worth highlighting that 80% of people say they don’t have savings set aside for their future.* So it might be worth thinking about life insurance, in case you can’t be there to provide for your family in the future.

If you’re new to life insurance, you could take a look at our beginner’s guide - What is life insurance?

Monthly premiums can vary depending on your personal circumstances. The amount of cover will affect how much you pay. And your insurance provider will take a number of other things into account. Including:

Age - The older you are, the higher the premiums will be. As you age, you also have more risk of developing a critical illness. That makes your cover more expensive.

Health - including your height, weight, medical history, family medical history and more. If you’re at risk of critical illness because of an existing medical condition, you might not be able to get cover. Or you might have to pay a higher premium.

Lifestyle - Smoking can increase your chances of becoming critically ill. Drinking a lot of alcohol can also increase your risk and mean you’ll pay a higher premium.

Occupation - Having a high-risk job can mean there’s more chance of you getting a physical injury or critical illness. That can increase the cost of your cover.

Whether you need critical illness cover or not depends on your own circumstances. But here are some reasons why it might be good to have.

If you’re the only one in your family earning an income, you might want to think about critical illness cover. If you become critically ill, a lump sum payout could help you with medical care and living expenses.

Our research shows that 29% of Brits admit ‘their partner’s ability to manage alone’ is their biggest financial worry for when they die.* So it’s worth thinking about financial protection - for you and your loved ones.

If you’re self-employed, you might not have the same benefits as working for a large company. Things like sick pay, annual leave or private healthcare. Having critical illness cover can help you to pay the bills while you’re not working.

If you become critically ill, critical illness cover can help you to meet monthly expenses if you don’t have enough savings to fall back on.

It might be worth thinking about critical illness cover if you have any financial obligations - like a mortgage, rent or childcare. A lump sum could help you cover these costs if you become critically ill.

Critical illness cover can also help to give you financial support while you’re getting medical care. A lump sum could remove some of your worries and help you to focus on your recovery.

The amount of critical illness cover you need depends on your personal circumstances.

Think about your monthly expenses, and what you’d still need to pay out if you weren’t able to work. So, things like your mortgage, living expenses and childcare or education costs.

To make sure you and your loved ones have financial protection for different circumstances, you could get critical illness cover along with life insurance. The policies would be separate, so they could both pay out.

The main difference between critical and terminal illness is how serious the condition is. A critical illness is a serious condition, but you can usually recover from it. If you have a terminal illness, it’s incurable and you’re likely to die from it.

It’s worth knowing that life insurance doesn’t just pay out a lump sum to your loved ones if you die. It can sometimes pay you a lump sum if you’re diagnosed with a terminal illness.

To be considered terminally ill, your doctor needs to confirm that:

If your condition doesn’t meet the criteria for a terminal illness claim under your life insurance policy, you might be able to claim on your critical illness cover. But only if your condition is covered by your policy.

*Based on Tesco Insurance “life insurance research”