Critical illness cover is a type of insurance available in the UK that provides a one-time, tax-free lump sum payment if you’re diagnosed with a specific serious illness outlined in your policy. It’s designed to offer financial support during challenging times, helping with expenses like bills or medical costs while you recover. In 2023, UK insurers paid out £1.22 billion in critical illness claims, supporting thousands of policyholders ABI, 2023.
How It Works
You receive a payout if you’re diagnosed with a covered condition and meet the policy’s terms, such as surviving a set period after diagnosis. At Spirit Cover, this is available as an optional add-on to life insurance policies, not as a standalone product online, though standalone options can be arranged through our advisers.
What Sets Spirit Apart
Spirit Cover includes additional features within its policies:
- Trust Option: Policies can be placed in a trust at no extra charge, which may help reduce inheritance tax liability (40% on estates over £325,000 HMRC, 2023), depending on individual circumstances and tax rules.
- Additional Benefits: Features such as access to GP services 24/7 or physiotherapy support are included as standard, subject to policy terms.
Key Facts to Know
- It differs from life insurance, which pays on death, or income protection, which offers monthly payments.
- Only illnesses listed in the policy - typically 30-50 conditions - are covered, and exclusions apply, such as for early-stage cancers unless specified.
- Factors like age, health, and cover amount influence eligibility and terms, as noted in industry data ABI, 2023.
Is It Right for You?
It depends on your financial situation and needs. If you’d struggle without support during a serious illness, it’s worth exploring. Spirit’s advisers can explain options clearly, with no pressure.