Critical Illness Cover

A critical illness plan pays out a lump sum if you are diagnosed with any of the specified critical illnesses but survive for a period of time after diagnosis.

The lump sum you get could be used to pay for things like nursing care, home help, or adapting your house to accommodate a disability. It could also pay off your mortgage or pay for a holiday to help you recover from treatment.

Critical illnesses usually include cancer, heart attack, kidney failure, multiple sclerosis, major organ transplant and strokes. These are known as core conditions and are the most common illnesses people claim for.

The breadth of conditions covered varies between the companies that offer the insurance coverage. The details of what is covered are fully explained in the policy papers, which you must check fully to ensure that everything meets your needs.

Permanent disability is usually included in the contract. Some insurers define permanent disability as being unable to work as you normally would as a result of sickness whilst others see it as being unable to independently perform three or more ‘Activities of Daily Living’ as a result of sickness or an accident.

Activities of daily living include the following:

• Bathing
• Dressing and undressing
• Eating
• Transferring from bed to chair, and back again

The contract terms will contain very detailed rules that classify when a diagnosis of a critical illness is to be considered valid. It may specify that the diagnosis needs to be made by a physician that specialises in that certain illness or condition, or it may name definite tests that will verify the diagnosis.

You can also purchase Critical illness cover for children.

In certain markets the definition of a claim for many illnesses and conditions have become standardised which means all insurers would use the same claims definition. In the United Kingdom, the Association of British Insurers (ABI) has issued a 'Statement of Best Practise', which contains a few standard definitions of critical illnesses.