Does life insurance cover critical illness?

It's possible to add critical illness cover to most life insurance policies.

Whilst it comes at an additional cost, this extra layer of protection will provide a lump sum pay out if you're diagnosed with a life-changing, but not terminal, illness detailed within your policy.

Generically, life insurance won't cover you for diagnosis of critical illness unless you have opted for this further level of protection.

At Reassured, we can arrange life insurance with critical illness cover from as little as 20p-a-day.

Simply get in touch for your free quotes and protect yourself and loved ones whether you pass away or are diagnosed with a life-changing condition.

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How long does a critical illness claim take?

Unlike life insurance claims, critical illness claims require you to provide medical evidence of your condition. Therefore, a claim can take slightly longer - usually around 8 weeks.

When diagnosed with a critical illness, you should contact your insurance provider as soon as possible.

They'll require you to provide information regarding the new critical illness to assess whether it fits their claims criteria.

Once your claim has been assessed, payment will be made directly to your bank account approximately 8 weeks after first filing the claim[1].

In some instances, this can take longer if further information/investigation regarding your condition is required.

Upon discussing your initial claim, your insurance provider will be able to provide you with a more accurate timescale of when the claim is likely to be paid.

Critical illness claim time limit

A critical illness claim can be made from the date of diagnosis.

To ensure the best chances of a critical illness claim being accepted, you should file your claim as soon as possible or arrange for a loved one to contact your provider on your behalf to inform them of the circumstances.

Most providers will require you to survive a minimum of 14 days from diagnosis before a critical illness payment will be issued.

How much does critical illness cover pay out?

Typically, critical illness cover will pay out the full sum assured as stated on your life insurance policy.

Therefore, the same amount will be received whether you were to contract a life-changing illness or were to pass away.

However, in some instances, providers will only pay out a percentage of the sum assured dependant on the severity of the diagnosed illness.

Depending on your cover, this is likely to be between £10,000 - £1,000,000.

Once a critical illness claim has been paid, your life insurance will expire and there'll be no further pay out if you were to pass away.

How much critical illness cover do you need?

Enter your financial commitments to understand the level of cover you require.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
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You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
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Your total cover estimate

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Let us find your best quotes.

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Critical illness pay out rates

The average critical illness pay out in the UK is £68,000[2].

The latest figures show that 92.2% of all critical illness claims were successful[3], suggesting the likelihood of a claim being accepted is high.

This figure rises to 95% from some providers.

Critical illness claim rejected

There are two main instances when a critical illness claim may be rejected. These are:

  1. Non-disclosure
  2. Uncovered illness

Non-disclosure

When arranging critical illness cover you'll be required to provide details of your current medical wellbeing.

It can be tempting to withhold unfavourable information during the application process as a means of securing more favourable premiums.

However, certain pre-existing conditions can lead to exclusions within your cover, for example, hypertension may result in related illnesses such as heart attack or stroke being excluded from your cover.

If when a claim is processed it's discovered that you had an existing, undisclosed medical condition at application, a claim may be rejected.


Uncovered illnesses

The list of illnesses covered by critical illness cover will vary between insurers.

Therefore, when arranging your cover, it's essential to be aware of exactly what it is you're protected against.

If you were to fall ill with a life-changing illness which isn’t covered in your policy, a claim will be denied.

Obtaining life insurance with critical illness cover

As with standalone life insurance, the cost and cover of a combined policy incorporating critical illness cover can vary significantly between providers.

At Reassured, we can provide you with all the information and quotes you need to make an informed decision.

Contact our award-winning team today for your free quotes.

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Sources:

[1] https://www.aegon.co.uk/support/faq/how-do-i/protection-servicing/claims/How-long-will-my-claim-take.html

[2] https://www.onlinemoneyadvisor.co.uk/insurance/critical-illness-cover/critical-illness-cover-payout/

[3] https://www.drewberryinsurance.co.uk/knowledge/critical-illness-insurance/critical-illness-cover-claim-payout-rates-by-insurer#OverallProtectionPay2

[4] https://www.financial-ombudsman.org.uk/businesses/complaints-deal/investments/critical-illness-cover

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