Variations of critical illness cover, what are the differences?

Critical illness cover can come in a range of different ways, but the idea stays the same. It is there to provide financial security and payout if you were to be diagnosed with a critical illness. The policy you take out could be quite different from insurer to insurer, and we’re going to explain how.

When you take out a critical illness policy, you will decide how much cover you may need and how long you want the policy to cover you for. On top of that, there are other things to think about when deciding which insurer to use.

Typically, when you take out critical illness cover, the policy will cover you for certain conditions, which are on the insurer’s claim set. This is normally at least 50 different conditions. There are conditions that if diagnosed will lead to a full payout of the policy and some that will lead to a ‘partial payout’. A partial payout is where you are diagnosed with a condition that isn’t nice and the insurer wants to give you support, but it’s also not reached a level that is what they feel is ‘critical’.

The insurer’s claim set is known to be quite particular, they will usually include conditions that are listed by the Association of British Insurers’ as critical illness, as well as some more that the insurer feels are valuable to their customers. In recent years, some insurers have developed their lists, going above and beyond minimum standards, which can actually make it easier for a client to claim on their policy.

For example, some insurers may only accept a claim for a heart attack if your troponin levels are at a certain level. This is technical jargon that basically means the insurer is establishing if your heart attack was ‘strong’ enough to make a claim on the policy. There are, though, now insurers who will accept a claim for a heart attack, no matter the circumstances.

Another example is that many insurers will list specific neurological conditions, such as Alzheimer’s and Parkinson’s. These will be conditions that you would usually be able to claim on once the symptoms of the condition have reached a certain severity. There is an insurer which recently changed their policies, so that they now cover ‘neurological conditions’. And covers for any neurological condition which leaves you with a permanent long term severity of symptoms. This isn’t specific to any particular conditions, and really opens up the situations where a claim can be made.

Another example of differences that you might see between insurers is that a critical illness policy might cover you for ‘carcinoma in situ of…’ for instance, in say 14 places. Other insurers might not list certain places, and instead will just have ‘carcinoma in situ’ as a claim definition. Instead of being specific, they just have one thing on their claims set which encapsulates many things.

There are even more differences. Some policies might be a standard critical illness policy, or you can find policies which include critical illness cover for your children too. On top of that, there are extended critical illness policies which cover more than the normal number of conditions, and you can also find these policies with children cover included too. This is all very wordy and it’s not a surprise that it’s quite hard to follow what different insurers will offer. Generally, many insurers will offer options of:

Critical illness cover – standard
Critical illness cover – standard with children’s cover
Critical illness cover – enhanced
Critical illness cover – enhanced with children’s cover

This is just a few of the ways that critical illness policies can be different from one another. Each insurer will have their own guidance about what conditions they will cover and what they might not, and it’s common for the guidance to also say if a certain level of severity is needed for the policy to be claimed on. That means that being diagnosed with a critical illness isn’t always going to automatically result in a payout from the policy.

It’s so important to really take the time to understand what your critical illness policy covers you for, as it’s not a one fits all type of thing. This information should be readily available from your insurer, and should be mentioned within the terms and conditions of your policy too. A key thing to remember is that with most insurer’s when you take out critical illness cover you are signing up for their set of claimable conditions now. Just like they are insuring you based upon your health and circumstances now, you are also taking on the insurers terms and conditions now. If the insurer improves or changes their contract going forward, you will not usually be covered by their new offering going forward, instead you will still be signed up for the contract they offered and the day the policy started.

If you have used an adviser to arrange your policy, they should be able to help you if you’re unsure about what you’re covered for. If you have any concerns or questions about critical illness cover, we have a number of advisers ready to help.

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