Critical illness cover is an insurance policy that pays out a lump sum if the policyholder is diagnosed with a serious illness specified in the policy terms, such as certain cancers, a heart attack, or a stroke.

It’s often taken out alongside a mortgage, since a serious illness diagnosis can affect a household’s ability to keep up with repayments, though critical illness cover is a separate product to life insurance and to income protection, and pays out only for the specific conditions listed in the policy, not for every illness or injury. Policies vary between providers in terms of which conditions are covered and how they’re defined, so it’s worth comparing options and getting advice on what level of cover is appropriate for your circumstances.

How Critical Illness Cover Is Underwritten and Claimed

In short: a critical illness policy pays out on a defined list of conditions, at a defined severity, after a defined survival period, and those three definitions decide almost every claim. Two policies can both say they cover “cancer” and still behave very differently, so the wording matters more than the headline list of conditions.

Condition definitions and severity thresholds

Insurers describe each condition against a clinical threshold rather than a plain-English label. A heart attack, for example, is usually defined by evidence of cardiac enzyme changes alongside symptoms and ECG findings, not simply by the diagnosis appearing in your notes. Many insurers also pay a reduced amount for less advanced conditions, often called partial or additional payments, which can pay a percentage of the sum assured without ending the policy.

The survival period

Most policies require the policyholder to survive a set period after diagnosis, commonly 10 to 14 days, before the lump sum becomes payable. This is a routine feature rather than a trap, but it is one reason critical illness cover is often arranged alongside life cover rather than instead of it, so that a household is protected in either outcome.

Disclosure at application stage

Applications are medically underwritten, which means you answer questions on your health history, family history, smoking status, height and weight, and occupation. Your duty is to take reasonable care not to make a misrepresentation. If your GP records are later requested at claim stage and contradict what was disclosed, the claim can be affected, so it is better to over-disclose an investigation or a symptom you were unsure about than to leave it out.

How it sits alongside a mortgage

Cover is often written on a decreasing basis to track a repayment mortgage, or on a level basis where the borrower wants a fixed lump sum regardless of the outstanding balance. Interest-only borrowers generally need level cover, because the capital balance does not reduce over the term. Whether the policy should be written in trust, and who the beneficiaries should be, is worth discussing before the policy starts rather than afterwards.

Read our fuller guide to critical illness cover, compare it with our income protection insurance guide, and see how insurers apply the definition of a smoker for life insurance. You can browse everything in our mortgage, property and money advice hub, meet our advice team, or return to the Needing Advice homepage.