Is critical illness cover the same as terminal illness?

No, critical and terminal illness cover is not the same.

When looking at life insurance you’ll often see the terms terminal illness cover and critical illness cover interchangeably used. However, they're very different.

They’re similar in providing an additional layer of cover that can be used as a safety net on top of your life insurance policy, but the protection they provide isn’t the same.

At Reassured, all term policies taken out through us come with terminal illness cover as standard and critical illness cover can be added at an additional cost.

So what are you covered for and what’s the difference between the two?

Read on to find out everything you need to know about terminal illness vs critical illness…

Whats the difference between terminal illness cover and critical illness cover?

There are some key differences between terminal illness cover and critical illness cover.

Terminal illness cover Critical illness cover
Comes as standard with a term life insurance policy at no extra cost Can be added to a life insurance policy for an additional cost
Allows you to make an early claim on your life insurance policy Can be purchased as a standalone product
A claim can be made upon being diagnosed with a life threatening illness that is predicted to result in death within 12 months Will pay out upon diagnosis of a serious illness listed in policy (during the term)
Once a claim has been made, your cover will expire (including life insurance)


However, the similarity between the two is that a pay out can be used to ease the financial stress that may come along with being seriously ill.

This will allow you to:

  • Pay off the mortgage (to protect your family home)
  • Cover medical treatmeant/bills
  • Take care of other large debts
  • Make adaptions to your home
  • Ensure financial affairs are in order
  • Pay for carers

Terminal illness cover explained

As discussed, terminal illness cover comes as standard with all term life insurance policies taken out through Reassured.

This type of cover allows you to make an early claim on your life insurance policy if you’re diagnosed with a life-threatening illness and predicted to pass away within 12 months.

The pay out can be used to pay for private medical treatment, make adaptions to your home or give you peace of mind that your financial affairs will be in order.

Unfortunately, terminal illness can't be purchased as a standalone product.

What does terminal illness mean?

A terminal illness, in regards to life insurance, refers to a life-threatening illness that will result in death within 12 months.

List of terminal illnesses

The list of terminal illnesses covered will vary depending on the provider but, typically terminal illness cover will include:

Terminal illness pros and cons

Terminal illness cover can be extremely beneficial.

If you were to be diagnosed with a life-threatening illness, this could have huge implications for your loved ones.

Terminal illness cover can help to eliminate any financial stress that might come along during this time by providing an early pay out from your life insurance policy.

However, it's important to know that once you have made a terminal illness claim, your life cover will expire.

PROs CONs
Free of charge with life insurance policy Once claim has been made, policy will expire (including life insurance)
Can make an early claim on your life insurance policy
Pay out can help loved ones to relieve any financial stress
Can be used to pay medical bills and ensure affairs are in order

Critical illness cover explained

Critical illness cover can be added to a life insurance policy (combined cover) for an additional fee or bought as a standalone product.

It’ll provide a lump sum pay out if you’re diagnosed with a serious illness that’s listed in your policy.

When purchased as a combined policy, critical illness cover will become part of your life insurance policy and you’ll only pay one premium.

What is classed as a critical illness?

Typically a critical illness refers to a specified serious illness. This can include:

Each insurer will have a list of illnesses that they deem to be critical, so illnesses covered under critical illness cover will differ between providers.

Definitions of illnesses will also differ between insurers.

Reassured’s Big 3 (critical illness cover)

Reassured customers can benefit from an exclusive critical illness cover called the Big 3.

If accepted for a life insurance policy (on standard terms), you’ll be eligible to take out a separate Big 3 policy.

This will provide protection from the three most common critical illnesses and is cheaper than extensive CIC.

The 3 illnesses covered by Big 3 are:

  • Heart attack
  • Stroke
  • Cancer

Big 3 cover will also protect your children, providing a pay out if they are diagnosed with any of the covered illnesses.

Critical illness pros and cons

When diagnosed with a serious illness, you may become too ill to work.

This can cause a financial strain on your family at an already stressful time.

A pay out from a critical illness claim can help to cover day to day living expenses for your family, as well as pay off any medical fees and make necessary adaptions to your home.

However, similar to term-based life insurance, you'll only be protected for a specific time period. This will be agreed when you take your policy out.

PROs CONs
Additional cover in case you fall ill and are unable to work Comes at an additional cost
Pay out can be used to help cover any large expenses Only protected for a specified period of time
Making a critical illness claim wont affect your life insurance policy if purchased as a standalone product Upper age limit of 70

Critical illness cover without life insurance

The main difference between terminal illness cover and critical illness cover is that critical illness cover can be bought as a standalone product.

Unlike terminal illness, you don’t need to purchase a life insurance policy to benefit from critical illness cover.

Critical illness cover can be your only form of protection or it can run alongside your life insurance policy.

Although having two separate policies may use more of your budget, it provides an opportunity for two separate pay outs.

Making a claim

Both claims can be made upon the diagnosis of a serious illness, although the extent of the illness will affect which cover you make a claim on.

Terminal diagnosis

Upon the diagnosis of a terminal illness (if you're predicted to pass away within 12 months) you can make an early claim on your life insurance policy.

It’s likely your insurer will need medical proof to confirm your condition in order to process the claim.

In some instances, they may ask for further examination.

Once you’ve made a terminal illness claim, your loved ones won’t be able to make a claim on your life insurance policy when you passed away (as the sum assured will have already been paid out).

Critical illness diagnosis

If you’re diagnosed with a serious illness and it meets the definitions outlined in your policy, you can make a critical illness cover claim.

Similarly, you may need to provide medical proof to the insurer.

Making a critical illness claim won’t affect your life insurance policy and a claim can still be made on this.

To make a critical or terminal illness claim, you’ll need to contact your insurer.

Do I need both?

Whether you need both forms of cover will depend on your own personal needs.

Terminal illness comes as standard with life insurance policies purchased through Reassured, so you’ll benefit from this additional cover simply by taking out a policy.

Whether you want to add critical illness to your policy will depend on what you want to protect and your budget.

If your circumstances change later on down the line and you decide you would benefit from having critical illness cover in place, you can purchase a policy at a later date.

Compare quotes to secure the right cover

As stated above, whether you need critical illness cover on top of a life insurance policy with terminal illness cover will depend on your needs and budget.

Having both forms of cover in place can be extremely beneficial to your loved ones by providing additional protection if the worst were to happen.

By speaking with an impartial FCA registered broker, such as Reassured, you can gather all the information you need so you can make an informed decision on what’s best for you.

What’s more, we don’t charge a fee for our award-winning service.

Get in touch to find the right cover, at the best available price.

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