Updated: August 05, 2019

Critical Illness Cover: The Pros and Cons

Pondering the benefits of critical illness cover? In this article we'll explain the key points to consider and how to find the right fit for you

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: August 05, 2019

There are lots of points to consider when comparing critical illness policies, the first being the advantages and disadvantages of the cover being offered.

With every insurance provider offering different terms, payouts and conditions, it’s important to be clear about the benefits of the policy and whether critical illness cover is worth taking out for you.

To help you make an informed decision about critical illness insurance, we’ve created this short guide which covers:

If you would like to talk to an expert for advice about the benefits of critical illness cover, make an enquiry.

Advantages and disadvantages

A lot of people aren’t in a position to comfortably afford their outgoings when not earning. Critical illness insurance cover can provide financial protection with a lump sum payout if you are diagnosed with a serious condition or illness. Many people have financially benefited from their insurance cover during periods of time when they are unable to work.

This can provide a huge sense of relief for policyholders who feel assured that their mortgage, bills and other outgoings will be covered if they are no longer in a position to work.

Suffering from an illness, disability or disease can be difficult enough but the stress and financial burden of trying to keep up with bills and other expenses can make these unfortunate times even harder.

Any insurance policy needs careful consideration and you need to be certain that the plan you take out is right for you.

Talking to a critical illness insurance expert is always helpful as they can explain the pros and cons of each critical illness cover, though read the sections below to get started.


If you were to fall ill and become unable to work, there could be financial benefits of critical illness insurance.

Freedom to spend the payout as you like

A key benefit would be that your policy could provide you with a lump sum of money that can be used in any way you see fit. This could include paying off bills, financially supporting loved ones or taking a well-deserved break abroad with the family.

You could use the funds to generate more income

Although you would hope that you never have to make a claim, if you should have to, it can be a good idea to use a portion of the funds to invest. After paying their outgoings, many parents decide to do this with intentions of generating a future income for their children.

The rate of payout is high

The Association of British Insurers (ABI) found that in 2016, £4.7 billion was paid in some form of protection insurance policy to claimants in the UK.

In fact, out of 15,464 claims, 92.2% were paid out.

Before making a decision to sign a critical illness cover agreement, always checks their rate of payout. This information should be published on their website.

If you cannot easily find it, contact an advisor who can source this information for you as well as any other policies that you wish to compare.

You may be able to cover your children for free

There are insurers that also offer children’s critical illness cover along with your own. This can be really helpful in the event that you have to take time off work to care for your children.

You may find that the pay out can be lower however, there are insurance providers that offer the additional cover at no extra cost to your own cover.

If you would like to discuss whether critical illness cover will be any good for you and your family, contact an advisor. 

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Having critical insurance cover provides an assurance that, should the worst happen, you are at least financially covered.

However, there are also some other factors that you should consider before taking out a policy.

Your policy might not cover every condition or illness

Unfortunately, not every policy will pay out or cover for every individual illness, disease or disability. This is because the conditions covered are different for each lender, though many have optional conditions you can add to the policy.

Because of this, it is vital that ahead of agreeing to sign a contract, you have thoroughly checked the terms and conditions. Some experts might suggest that you consider an income protection policy as well, since this will pay out if you’re prevented from being able to work.

If the range of cover isn’t immediately clear upon reading your agreement, ask the policy provider to clarify what you will be covered for.

It can also be helpful to have an insurance advisor examine your contract. They will be able to highlight which illnesses you’ll be financially protected for and which ones you won’t.

The amount you’re covered for and the price of your premiums can vary

Every insurance provider will offer varying rates, depending on your own circumstances and this can therefore affect the amount you are insured for.

Your health, lifestyle and age can have a huge impact on your ability to take out critical illness insurance.

You may be asked personal questions about your lifestyle upon applying for cover and although this can seem intrusive, it will be necessary in providing you with accurate cover.

Ahead of applying, some people aim to improve their health in order to pay lower monthly premiums but it’s important that the information you provide on your application is correct as misinformation can lead to claim refusals.

The amount of times you can claim is limited

Another factor to consider before taking out a critical illness insurance plan is that most providers will only pay out for one claim.

Therefore, if you were to make a claim and receive a payout, you may not be entitled to claim again, even in the event of your death.

However, with the help of an insurance advisor, it may be possible to find an insurance provider that will pay out more than once.

In fact, there are some critical illness protection providers that will pay out smaller sums after previously paying out for a claim.

Speak to an advisor for more information about the insurance providers that currently offer this.

It can be expensive

Whilst it’s true that some critical insurance cover providers can charge excessive premiums for their policies, there are also those that provide a fair amount of cover for a more affordable cost.

The key to finding a fair deal is to compare various quotes from different providers. Not all policies are the same and the cover they provide as well as the free gifts for signing up can vary.

An insurance specialist can scour the market on your behalf, saving you the time and hassle.

Because of their industry experience, they’ll already be aware of which insurance providers are most suitable for you.

Speak to an advisor to kickstart your search and to find the best deal.

Talk to an insurance expert

Contact a critical illness insurance specialist today for free and impartial advice. The advisors we work with can talk you through the pros and cons of each critical insurance policy and recommend the best one for you based on your circumstances.

Give us a call on 0808 189 0463 or fill out an enquiry form and an advisor will respond as soon as possible.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in critical illness cover. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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