Critical Illness Cover

Critical or Serious Illness Cover

Critical illness cover is an insurance policy that pays out a lump sum in the event that the insured person is diagnosed with a critical illness during the term of the policy. It is a big misconception that you must have critical illness insurance if you have a mortgage. Whilst it is always recommended, it is not a mandatory insurance. It may not even be needed so we always advise you to speak to an insurance expert like The Mortgage Pride to help establish if critical illness insurance is needed in your individual circumstances and ensure the most suitable policy is arranged for your needs.


How Do I Know the Right Insurance Policy for My Situation?

Every critical illness insurance policy is different so choosing the right one for your own circumstances is important. When choosing, you need to consider the reason you are taking out the cover. For example, are you taking it out to repay the mortgage in the event you suffer a critical illness during the mortgage term or are you taking it out to provide a lump sum to help make any necessary adaptions or meet additional care needs?

This will help you to determine how much you want to be covered for and how long you want to be covered for. If you are covering your mortgage for example, then it could be you choose a term that matches the number of years your mortgage is going to run for and a benefit amount that matches the mortgage balance. Or you may want to choose a longer/shorter term and different benefit amount if you are taking the policy out for a different reason.

Types of Critical Illness Insurance Policies

After determining the right insurance policy for your situation, the next thing to consider is the type of critical illness policy you need. There are three types:

  • Decreasing – this is where the amount the policy will pay out decreases over the term of the policy. This is usually most suitable if you are taking the cover out to repay your mortgage and you have a repayment mortgage.
  • Level – this is where the amount of cover remains the same over the term of the insurance policy. For example, if you take out cover for £100,000, regardless of when you claimed during the term of the policy, £100,000 would be paid out to you. This may be suitable if you are wanting to provide a lump sum to help with living costs upon diagnosis of a critical illness.
  • Increasing – this is where the amount the policy will pay out increases over the term of the policy based on inflation and the retail price index.


So you have decided how long you want to be covered for, how much you want to be covered for and the type of policy you need. Now you need to consider the type of monthly premiums you want.

What Monthly Premiums can I Use?

Many critical insurance policies will offer you two types of premiums:

  • Guaranteed – this is where your monthly premium will not change for the life of the policy providing no changes are made to the policy.
  • Reviewable – this is where your policy will be reviewed at key times during the policy (for example every 5 years) and the cost of your monthly premium will be adjusted upon review so it could go up or down.


Another consideration is to decide if you want a waiver of premium added to your critical illness insurance policy. This addition will ensure your policy remains in place should you be unable to work due to an accident or illness as it will pay your monthly premiums on your behalf in this situation after a defined number of months. After all, if you stop paying your monthly premiums, it is likely your critical illness insurance will be cancelled by the provider and you will no longer be covered. Waiver of premium helps avoid this happening.


When it comes to critical illness insurance, each provider is different in the number of critical illness conditions they cover and the definition of the critical illness conditions used for claims. And if considering serious illness cover instead of critical illness cover, this changes again as these tend to cover a greater number of conditions and payout in stages. Still, you may receive less in the event of a claim than policies providing critical illness insurance.


Many insurance providers offer two levels of cover:

  • Standard – provides cover against a ‘standard list’ of critical illness conditions
  • Enhanced – usually provides cover against a larger number of critical illness conditions

What Else Do I Need to Consider?

Finally, you need to decide if you want to include children’s cover  in your policy. Some providers include this as standard, at no additional cost to you. However, some providers do charge a monthly fee for children’s cover to be included. 

If you want peace of mind that your critical illness cover is suitable for your individual needs, we recommend using critical illness insurance experts like us at The Mortgage Pride.

We have access to a wide number of insurance providers offering critical illness cover and individual, jargonfree protection advice tailored to your budget. We can also review existing policies for you as well, to give you the peace of mind that your current critical illness insurance or serious illness cover remains suitable for your needs.

So, if you want to let our Pride look after Yours, book a free initial call with us today.

*Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage early.