Critical Illness Cover

Policies will vary in exactly what their critical illness cover includes, however there are four commonly represented conditions. Post Office critical illness cover includes these four conditions only, and they reflect some of the most common serious illnesses in the UK. 

• Cancer (except less advanced cases)
• Coronary artery by-pass grafts (with surgery to divide the breastbone)
• Heart attack (of specified severity)
• Stroke (resulting in permanent symptoms)

According to the ABI, cancer is by far and away the most common claim on critical illness cover, representing 62% of all claims in 2024 across insurers. For full definitions and details about what is and isn’t covered, please refer to the terms and conditions.

Critical illness cover is straightforward in principle. You choose how much cover you want, a certain amount is added on to your monthly life insurance premium, and if you're diagnosed with a specified condition during the policy term, you receive a tax-free lump sum.

You're free to spend the money however you like. There's no requirement to use it for medical costs, though many people choose to.

Here are some key aspects of Post Office critical illness cover:

• You can include it when you apply for a life insurance policy or add it on later
• It provides a minimum of £10,000 cover 
• The maximum cover at the start date is either 100% of the main policy cash sum or up to £200,000, whichever is lower

A few important things to understand about how policies work:

• Most policies include a short waiting period at the start, typically three months, during which you can't make a claim. Post Office critical illness cover follows this standard
• You need to survive for at least 30 days following your diagnosis before a claim can be paid. In other words, you can’t claim on both your critical illness cover and life insurance for a very short illness that results in your passing. If you survive for longer than 30 days but pass away before your life insurance term ends, you would receive both payouts
• Once a critical illness claim is paid out, that element of your cover ends. Your main life insurance policy continues, and your monthly premium reduces accordingly, as you're no longer paying for the critical illness add-on
• The payout from your critical illness cover doesn't reduce your life insurance sum. If you later die during the policy term, your full life cover amount remains in place for your loved ones.

Critical illness cover is sometimes confused with income protection, but the two products work quite differently. Understanding the distinction can help you decide which is right for your situation, and whether you might benefit from both.

Critical illness cover pays a one-off lump sum if you're diagnosed with a listed condition. Income protection pays a regular monthly income if you're unable to work for any medical reason, covering a much broader range of conditions but in a different way. There are trade-offs on both sides: critical illness cover enables you to make larger payments from the off, while income protection can offer more longer-term comfort.

Some people choose to have both, particularly where they have significant financial commitments and limited employer sick pay. Others may find that one product meets their needs adequately. Post Office offers critical illness cover as an add-on to life insurance. If you're interested in income protection as well, it's worth speaking to an independent financial adviser.

• Critical illness cover gives you financial support in the event you’re diagnosed with a defined condition, helping you cover day-to-day costs while you adjust to a new way of living
• It pays out a tax-free lump sum if you're diagnosed with a specified serious illness, and can be added to Post Office Life Insurance for an additional monthly premium
• There are four conditions covered by Post Office critical illness cover which represent some of the most common critical illnesses in the UK: cancer, heart attack, stroke and coronary artery bypass grafts
• Depending on your life insurance policy you can get up to £200,000 of critical illness cover with Post Office Life Insurance
• The payout doesn't reduce your life insurance sum. Your main policy continues in full after a critical illness claim is paid out

Critical illness cover is another way to protect your loved ones if life sends something unexpected your way. Money doesn’t solve everything, but some financial breathing room can be a huge help when you have a lot going on. You can take out a life insurance policy with Post Office online and add the amount of critical illness cover you’d like in just a few clicks.