Mortgage Matters Direct > Insurance > What is Critical Illness Insurance?

What is Critical Illness Insurance?

Critical Illness Insurance pays out a tax-free lump sum if you’re diagnosed with a serious illness or condition that’s specified in your policy. It’s often paid as soon as you’re diagnosed and will also pay out if you make a full recovery. The payment is often used to pay off your mortgage or to give you time to plan your next steps.

It can go towards paying for any necessary alterations needed for your home as a result of your illness – such as the addition of a stairlift or downstairs facilities. If this is combined with Life Insurance then only one of these policies will pay out. If you receive a lump sum from a Critical Illness policy following a cancer diagnosis for example, your next of kin won’t be able to claim your Life Insurance if you pass away, unless you have a separate policy.

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Which conditions are covered
by Critical Illness Insurance?

● Major organ transplant
● Head injury
● Paralysis
● Loss of sight or hearing

● Certain cancers
● Strokes
● Heart attacks
● Parkinson’s Disease

Other illnesses, injuries and conditions can also be covered, depending on the policy or provider.

Common Critical Illness exclusions:

Critical Illness Insurance will pay out even if you don’t die and make a full recovery. Insurers usually have exclusions on pre-existing conditions and may not provide cover if you’ve suffered from a particular disease or illness before.

Certain diseases may not be covered by your policy. Check which conditions are included before you decide whether this is for you.

Should I take out Critical Illness Insurance?

Critical Illness provides an extra safeguard if the worst should happen. Your mortgage can be paid off and, depending on the level of cover you take, you may also receive a tax-free lump sum on top of for other expenses.

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