What is Critical Illness Insurance?

This type of protection (also known as 'serious illness cover' or 'dread disease cover'), covers policyholders against a number of serious illnesses, diseases and medical conditions, paying out a lump sum of money on the diagnosis of one of the critical illnesses specified in the policy details. Common conditions covered include:

• myocardial infarction (heart attack)
• stroke
• renal failure
• cancer
• paralysis
• blindness
• deafness
• major organ transplant
• coronary artery bypass surgery

This one-off lump sum of money is designed to help the policy holder adapt to a major life-changing illness. For example, they may need to adapt their home or vehicle, or undergo training for a different occupation. If critical illness cover is included in a mortgage protection plan, the mortgage will be repaid, taking this financial burden away from the patient and their family.

As the policy is intended to cover living expenses, there is normally a requirement that the policyholder survives for a minimum specified period (14 - 30 days) following the date of diagnosis, in order for the policy to pay out.