What is the average cost of critical illness cover in the UK?

What is critical illness cover?

Critical illness cover gives you a lump sum payment if you're diagnosed with a serious illness covered by your policy.

This money can help ease the financial strain of a major health setback, covering lost income, medical bills, or even home modifications.

It’s a safety net to keep you and your family financially stable when you need it most.

What critical illnesses are covered?

Critical illness cover usually includes a range of serious illnesses, although the exact list can vary between insurers.

Some common illnesses covered are:

• Cancer
• Heart attack
• Stroke
• Loss of limb/s
• Kidney failure
• Organ transplant
• Multiple sclerosis
• Coronary artery bypass surgery
• Parkinson’s disease

It's important to note that not all illnesses are covered.

Pre-existing conditions are usually excluded, and certain illnesses that you or a family member have had before may not be covered. 

What is the average cost of critical illness cover?

The cost of critical illness cover can vary widely based on several factors.

The average cost of critical illness cover in the UK is currently around £25 per month for level term cover, based on a payout of £50,000. The cost is influenced by a range of personal factors. 

The type of cover you choose, whether level term or decreasing term, also affects the cost. 

With level term cover, the payout amount stays the same throughout the policy term, making it generally more expensive.

Decreasing term cover means the payout amount reduces over time, typically in line with a mortgage or other debt repayment, usually making it cheaper.

Below is a table that gives you an indication of the average monthly costs of critical cover depending on your age and type of cover, according to iam insured. 

What is taken into consideration when getting critical illness cover?

When insurers calculate the suitability and cost of critical illness cover, they consider various personal and lifestyle factors. 

Age

Your age plays a big role in determining the cost of critical illness cover. Generally, the younger you are, the lower your premiums.

As you age, the risk of developing a critical illness increases, which is reflected in higher premiums.

Your health

Your current health significantly impacts the average cost of critical illness cover in the UK. If you have a history of medical conditions or a poor health record, you’ll probably face higher premiums. Maintaining good health can lower your premiums, but your premiums are unlikely to decrease if your health improves after taking out a policy.

Are you a smoker?

Whether you smoke is another critical factor in the cost of critical illness cover as smokers typically pay higher premiums due to the increased risk of serious illnesses linked to smoking.

If you quit smoking, your premiums might reduce, but insurers usually require you to be smoke-free for a significant period, often 12 months, before lowering your rates.

Your occupation

Certain occupations carry higher risks and can influence your premiums. Jobs that are physically demanding or hazardous can result in higher costs due to the increased likelihood of injury or illness.

How much cover you need

The amount of critical illness cover you choose directly affects your premiums.

Higher coverage amounts mean higher premiums. It’s essential to balance the amount of coverage with what you can afford and what is sufficient to cover your needs in the event of a critical illness.

Is critical illness cover worth it?

Whether critical illness cover is worthwhile depends on your personal circumstances.

It can provide peace of mind and financial security if you have dependents, a mortgage, or other significant financial commitments.

This cover can be beneficial in scenarios where a critical illness would severely impact your financial situation.

Do I need critical illness cover?

Critical illness cover is worthwhile if:

• You have a family that depends on your income.
• You have significant financial obligations such as a mortgage.
• You lack substantial savings to cover potential medical costs.

On the other hand, it might not be necessary if:

• You have adequate savings to cover potential expenses.
• You already have comprehensive health insurance.

Other insurance policies, such as income protection or life insurance, might also be useful, depending on your needs.

How much critical illness cover do I need?

Ensuring you have enough coverage to meet your needs without overextending your budget is crucial.

The amount of cover you need varies based on your financial responsibilities and personal circumstances.

For example:

• A single individual with minimal debt might need around £50,000 in coverage.
• A family with a mortgage and children might require around £100,000 to £150,000 in coverage.
• Those with significant financial commitments or high living costs might consider £200,000 or more.

Get expert financial advice

Whether to invest in critical illness cover depends on your unique financial situation and health needs, as it offers a safety net during challenging times and provides financial relief.

By understanding the costs and coverage options, you can make an informed decision that best protects you and your loved ones.

Remember, it's about finding the right balance of coverage and affordability to ensure peace of mind and security for the future.

Let Unbiased connect you with an insurance broker or a financial adviser for expert financial advice to help you find the best critical illness policy for your needs.