Critical Illness Insurance / Cover

  • Family-Income-Benefit

Critical Illness Cover helps limit the financial impact of suffering a serious illness by paying out a tax-free cash lump sum. If you are unfortunate enough to suffer from a critical illness your life is likely to be suddenly turned upside down and this pay out can give the freedom to focus on your health and not your finances.

The funds could be used to pay for:

  • care, operations and treatment
  • adapting your home if you become disabled
  • repaying your mortgage and other debts
  • meeting the family’s monthly outgoings

All Critical Illness Insurance providers cover the three core conditions of cancer, major heart attack and stroke. However, different policies cover different illness and like with many things, cheapest isn’t always the best option as you ultimately get what you pay for.

A more comprehensive plan will have a long list of illnesses covered whilst having a broader set of policy definitions and our expert advisors will help you choose the best cover to maximise the likelihood of making a successful claim.

 How Does Critical Illness Cover Work?

  • When taking out a policy, you choose how much cover you require and over how long.
  • If you suffer from a critical illness and make a claim, the insurer will need to check that your diagnosis meets their definitions
  • Upon acceptance of the claim, the insurer pays out and if your illness is severe enough to receive the full sum assured, the policy then terminates.

Get a personalised quote from one of our expert Critical Illness Cover advisors

A Critical Illness pay out can be taken as a monthly income but the majority of policies are arranged as one of the following lump sum cover types:

Level Term Insurance

The sum assured stays the same throughout the chosen term, giving the reassurance of knowing exactly how much will be paid out regardless of when a successful claim occurs within the policy period.

This is typically taken out to provide a set level of financial security.

Decreasing Life Insurance

With decreasing cover the sum assured reduces throughout the term of the policy. This is primarily arranged to pay off a repayment mortgage.

As a mortgage reduces throughout the term the Critical Illness Insurance sum assured decreases roughly inline with the debt. Because the amount of cover provided by the insurer decreases over the policy term, the premiums for decreasing cover are usually lower than for level cover.


An increasing term policy is effectively level cover with an option to have the sum assured index-linked, meaning that it will increase throughout the policy term. This is primarily arranged to ensure that the cover amount is not eroded by the effects of inflation.

Children’s Cover

Many insurers also offer cover for your children if they are diagnosed with a critical illness. The potential pay-out varies between providers and is typically between £10,000 – £25,000 although it can be up to £100,000. If this benefit is paid out, it will not affect the overall sum assured or other future successful claims.

Partial Payments

Many critical illness policies also provide cover for less severe conditions, which are usually known as Partial Payments. Diagnosis of one of these conditions could result in a potential payment of up to £25,000 – £30,000, dependent upon insurer.

These partial payments form an essential part of modern plans and there are many differences between providers as to the number of partial pay-outs they insure. Likewise, some providers offer far more comprehensive policies through advisors than to the general public or comparison websites, so always arrange your critical illness policy through as experienced advisor who can show you the differences.

What if I die?

Critical illness policies are either arranged on a standalone basis or in a combination with Life Insurance giving some extra peace of mind for the family.

Care should be taken when arranging a standalone policy as some providers have a minimum period of survival after suffering a critical illness and as such may decline a pay-out. For example, suffer a heart attack and die, your family should be able to claim as a heart attack is a critical illness but could be rejected as death occurred immediately.

Nicholson Brown Limited is authorised and regulated by the Financial Conduct Authority under register number 671013.

Your home (or property) may be at risk of repossession if you do not keep up repayments on your mortgage or loan secured upon it.

We do not charge for our initial consultation, however we charge a brokerage fee for residential and buy to let mortgage applications. The fee is dependent upon the complexity of your case and is typically up to £500, payable upon completion of the transaction.

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