The terms 'critical illness’ and ‘terminal illness’ sound alike and both refer to serious medical conditions, but there are key differences between the two when talking about life insurance. Here we run through those differences to give you a clearer idea of what the two terms mean and how cover works for each.

What's the difference between critical illness and terminal illness?

If you were diagnosed with a specific illness or significant injury that you’re likely to be living with, then this would be deemed a critical illness. 

A terminal illness would be where you were given a terminal diagnosis and there is no known cure, or your condition's reached a point where it can no longer be cured, and your medical team expects it to result in death within 12 months.

Can I get critical illness insurance?

In simple terms it’s an insurance policy, paid for monthly, and can be bought on its own or alongside a life insurance policy. A life insurance policy pays out if you die during the term, whereas a critical illness policy pays you a lump sum while you’re alive if you become seriously ill or injured. 

What you’re covered for can vary, but the conditions will be named so you’ll know what’s covered and what isn’t during the term of the policy. 

Ours pays out if you’re diagnosed with any of 52 conditions. Some polices, ours included, also cover your children on the same policy for no extra cost.

Here are some of the most common conditions typically covered in a critical illness policy:

  • Cancer
  • Multiple sclerosis
  • Stroke
  • Heart attack
  • Brain tumour
  • Blindness
  • Paralysis 

While the most common cancers are covered, not all are and so it’s important to double check with your insurer if you’re unsure. You’re likely to find as well that you’ll need permanent symptoms to be able to claim for some conditions.

Do I need critical illness insurance? 

It’s a great question and the answer depends on your financial circumstances. No one plans to be diagnosed with a serious illness or injury, it’s often out of the blue and hugely disruptive to normal life. Unfortunately your living costs and bills won’t stop so, if you’re unable to work, a lump sum payout can really ease the financial pressure during a challenging time in your life.

You can use the money for anything, here are some of the things you could use it towards:

  • Mortgage or rent payments 
  • Paying off loans or debts
  • Bills and living costs
  • Adapting your home for living with your condition
  • Paying for carers
  • Paying for medical treatment

Can I get terminal illness cover?  

Terminal illness benefit differs from critical illness cover because it’s not generally bought on its own and is usually included with a life insurance policy. But, like critical illness insurance, it pays out while you’re alive if you’re diagnosed with a terminal illness, have exhausted all treatment options, and have less than 12 months left to live. 

Think of it as being allowed to make an early claim on your life insurance policy.

Just like critical illness insurance, you can spend your payout on whatever you like but people tend to think about the future and supporting loved ones when they’re gone.

Are critical illness and terminal illness insurance the same thing? 

No, they’re not the same. While the illnesses and injuries they cover are often very similar, critical illness insurance provides a payout for certain serious conditions that you will be living with, whereas terminal illness cover is included with life insurance and pays out if your condition can’t be treated and is likely to lead to death within 12 months. 

Here are some comparisons between critical illness insurance and terminal illness cover:

Critical Illness Insurance

  • Can be bought as a stand alone policy independent of life insurance
  • Will be an extra cost alongside a life insurance policy
  • Pays out on diagnosis of a serious condition or injury – covered under the policy T&Cs

Terminal Illness Cover

  • Included with most life insurance policies for no extra cost
  • Pays out on diagnosis of a terminal illness that meets the policy definition
  • The policy stops once the claim has been paid

Looking for critical illness insurance?

Discover the benefits that come with our critical illness cover.

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