Critical illness cover in Essex

A serious illness can affect your health, your ability to work and your household finances.

Critical illness cover is designed to pay a lump sum if you are diagnosed with a specified medical condition and the diagnosis meets the definition and required severity stated in the policy.

The payment could help you manage your mortgage, household bills or other financial commitments while you receive treatment or adjust to a change in your circumstances.

Alexandra Hamilton provides critical illness cover advice to individuals, couples, families and homeowners across Essex. Your adviser will take time to understand your circumstances, financial responsibilities and budget before making a recommendation.

You can also read about our wider protection advice and general critical illness cover service.

Important information about critical illness cover

Critical illness cover is subject to underwriting, eligibility requirements, policy definitions, exclusions and claim conditions.

A payment will only be made if:

• The diagnosed condition is included in the policy
• The diagnosis meets the insurer’s definition
• Any required level of severity is met
• Any applicable survival period is completed
• The insurer accepts the claim

A diagnosis on its own does not guarantee that a claim will be paid.

Cover will normally end if you do not maintain the required premiums. Critical illness cover is generally not designed as a savings product and will usually have no cash-in value.

A successful claim for the full insured amount will often end the critical illness cover. The exact position will depend on the policy, particularly where critical illness cover and life insurance have been arranged together.

You should read the policy documentation carefully and understand the definitions, exclusions and claim requirements before proceeding.

What is critical illness cover?

Critical illness cover is a form of protection insurance.

It is intended to provide a lump-sum payment if you are diagnosed with a medical condition covered by your policy and the insurer accepts the claim.

The policy will list the conditions it covers. It will also explain the medical definition and level of severity required for each condition.

For example, a policy may cover a particular type and stage of cancer rather than every cancer diagnosis. A heart attack may also need to meet specific medical evidence requirements before a claim is accepted.

Some policies include a survival period. This means you must survive for a stated number of days following the diagnosis or medical procedure before the benefit becomes payable.

Definitions and requirements vary between policies. Comparing only the number of conditions covered or the monthly premium may not provide a clear picture of the protection being offered.

How could a critical illness payment help?

Subject to how the policy is owned or assigned, the policyholder can normally decide how to use the proceeds of an accepted claim.

The payment could be used to:

• Repay or reduce your mortgage
• Meet rent or household bills
• Replace part of your lost income
• Pay for treatment or rehabilitation
• Make necessary changes to your home
• Meet childcare or care costs
• Repay loans or other financial commitments
• Cover travel expenses connected with treatment
• Reduce your working hours
• Give your household time to adjust its finances

The appropriate level of cover will depend on what you want the payment to achieve.

Someone who wants to repay a mortgage may require a different level of cover from someone who wants to meet household spending for a limited period.

Which medical conditions can be covered?

Many critical illness policies include specified forms and severities of cancer, heart attack and stroke.

Depending on the insurer and policy, other covered conditions may include:

• Multiple sclerosis
• Kidney failure
• Major organ failure
• Parkinson’s disease
• Certain forms of dementia
• Blindness or loss of sight
• Deafness or loss of hearing
• Loss of a limb
• Benign brain tumours
• Major heart surgery
• Permanent disability

This is not a complete list, and the inclusion of a condition does not mean that every diagnosis will result in a payment.

The diagnosis must meet the definition stated in the policy. Some policies also include:

• Partial payments for specified less severe conditions
• Additional payments for particular conditions
• Children’s critical illness benefits
• Cover for certain medical procedures
• Support services or second medical opinions

Partial and additional payments may affect the remaining level of cover, depending on the policy terms.

A longer list of conditions does not automatically mean that one policy provides better protection than another. The wording of the definitions, required severity and circumstances in which a claim may be paid should also be considered.

Who may wish to consider critical illness cover?

Critical illness cover may be worth considering if a qualifying diagnosis could create financial pressure for you or people who depend on you.

You may wish to review your protection if:

• You have a mortgage or significant borrowing
• Your household relies on your earnings
• You are self-employed
• You receive limited employer sick pay
• You have children or other financial dependants
• Your savings would not cover a long period away from work
• Your partner could not meet household costs alone
• You are buying a home or remortgaging
• You are reviewing insurance arranged several years ago
• You want money available for particular costs following a qualifying diagnosis

Critical illness cover will not be appropriate for everyone.

Your savings, employer benefits, existing policies, financial commitments and ability to maintain the premium should all be considered before a recommendation is made.

Critical illness cover and your mortgage

Your mortgage may be one of your household’s largest financial commitments.

If illness affected your income, meeting the repayments could become more difficult, particularly after employer sick pay or savings had been used.

Critical illness cover can be arranged with an insured amount that broadly reflects your outstanding mortgage. Following an accepted claim, the payment could be used to repay or reduce the loan.

This could lower your ongoing mortgage payments, but the proceeds do not have to be used for that purpose unless the policy has been assigned or arranged in a way that restricts their use.

You do not necessarily need to cover the full mortgage balance. A smaller amount of protection may still provide some financial support and may result in a lower premium.

However, you should also consider household bills, childcare, debts and other costs rather than looking only at the mortgage.

Further information is available on the mortgage advice page.

How much critical illness cover might you need?

There is no standard amount that will be appropriate for every person or household.

When assessing your requirements, your adviser may discuss:

• Your outstanding mortgage
• Rent and other housing costs
• Personal loans and credit commitments
• Monthly household expenditure
• Your income
• Your partner’s income
• Employer sick pay
• Savings and investments
• Existing insurance
• Workplace benefits
• Childcare and education costs
• Other financial dependants
• The period for which support may be required
• The premium you can reasonably maintain

A higher level of cover will normally result in a higher premium.

The aim is to consider an amount that reflects your identified priorities while remaining affordable throughout the intended policy term.

Taking out a policy that later becomes unaffordable could result in the cover being cancelled. If the required premiums are not maintained, the protection will normally end, and you may no longer be able to make a claim.

Different ways to arrange critical illness cover

Critical illness insurance can be arranged in different ways.

Level critical illness cover

With level cover, the insured amount normally remains fixed throughout the policy term.

This may be considered where you want a fixed lump sum for an interest-only mortgage, family support or other financial commitments.

The real value of a fixed benefit may reduce over time because of inflation.

Decreasing critical illness cover

With decreasing cover, the insured amount reduces over the policy term.

It is often considered alongside a repayment mortgage because the outstanding mortgage balance would normally reduce when repayments are maintained.

However, the policy benefit may not decrease at exactly the same rate as the mortgage balance. The mortgage interest rate, policy reduction method and repayment history can affect how closely the amounts correspond.

The potential benefit reduces over time, although the premium may be lower than for comparable level cover.

Increasing critical illness cover

Increasing cover is designed to help the insured amount keep pace with rising costs.

The amount of cover will normally increase at agreed intervals. The premium may also rise.

The method used to calculate increases varies between policies. You should consider whether the future premium is likely to remain affordable.

Critical illness cover and life insurance

Critical illness cover and life insurance protect against different events.

Subject to the policy terms and acceptance of a valid claim:

• Life insurance is designed to pay following the death of the insured person during the policy term
• Critical illness cover is designed to pay following a qualifying diagnosis while the insured person is alive

The 2 types of cover can be arranged separately or within a combined policy.

With some combined policies, a successful full critical illness claim will end the entire policy. This means there would not normally be a later life insurance payment under that policy.

Other arrangements may provide separate benefits or additional cover. The precise payout structure should be understood before you apply.

Critical illness cover and income protection

Critical illness cover provides a lump sum following an accepted claim.

It does not normally provide a regular monthly income and will not cover every illness or reason you may be unable to work.

Income protection is designed to provide regular payments if illness or injury prevents you from working and your claim meets the policy conditions.

The 2 types of protection may cover different financial needs.

A critical illness payment could be used to reduce borrowing or meet a major expense. Income protection may contribute towards regular household spending during a period when you are unable to work.

Additional policies will increase your total monthly premium. Your protection priorities and budget should be considered before several types of cover are arranged.

Families may also wish to understand how family income benefit works following the death of an insured person.

What affects the cost of critical illness cover?

The premium will depend on the cover selected and the insurer’s assessment of your application.

Factors may include:

• Your age
• Your smoking or nicotine use
• Your current health
• Your medical history
• Your family medical history
• Your occupation
• Your lifestyle and hobbies
• The amount of cover
• The policy term
• Whether cover is level, decreasing or increasing
• Whether life insurance is also included
• Any additional benefits selected

Applying when you are younger may result in a lower premium than applying for equivalent cover later. However, your health, lifestyle, occupation and policy requirements will also affect the cost.

The lowest-priced policy will not necessarily provide the most appropriate cover. Definitions, exclusions, additional benefits, premium terms and claim requirements should also be compared.

Guaranteed and reviewable premiums

The way your premium is set can affect what you pay during the policy term.

Guaranteed premiums

A guaranteed premium is intended to remain the same unless you make an agreed change to the policy.

Where the amount of cover increases, the premium may also increase in accordance with the policy terms.

Reviewable premiums

A reviewable premium may be reassessed by the insurer at specified intervals.

The premium could increase even if your personal circumstances have not changed. The reasons and process for reviews should be explained in the policy documentation.

You should understand whether the premium is guaranteed or reviewable before applying.

Can you obtain cover with a medical condition?

Having an existing medical condition does not automatically prevent you from obtaining critical illness cover.

Depending on your medical history, the insurer may:

• Offer its standard terms
• Charge a higher premium
• Apply an exclusion
• Amend the cover offered
• Request further medical information
• Postpone its decision
• Decline the application

Different insurers may assess the same medical history differently.

Your adviser can explain the application process and identify insurers available through the service that may be appropriate to approach.

Acceptance, exclusions, premiums and final terms remain subject to the insurer’s underwriting decision. No adviser can guarantee that an insurer will offer cover or accept a future claim.

Why accurate information matters

You must answer the insurer’s application questions accurately and completely.

You may be asked about:

• Existing medical conditions
• Previous diagnoses
• Medication
• Medical tests
• Treatment
• Family medical history
• Smoking and nicotine use
• Alcohol consumption
• Your occupation
• Hazardous activities or hobbies

Incorrect, incomplete or misleading information could affect the insurer’s decision, the policy terms or whether a future claim is paid.

Ask your adviser or the insurer for clarification if you do not understand a question.

Why comparing policies matters

Critical illness policies can differ considerably.

A meaningful comparison should consider:

• The medical conditions included
• The definition used for each condition
• The required severity
• The survival period
• Full, partial and additional payments
• Any children’s benefits
• Exclusions and restrictions
• Whether the premium is guaranteed or reviewable
• Whether the cover can change following a life event
• What happens after a successful claim
• Whether life insurance is included
• Support services provided by the insurer
• The affordability of the premium

You should understand what a policy does and does not cover before deciding whether to proceed.

Our critical illness advice process

Understanding your circumstances

Your adviser will discuss your income, expenditure, mortgage, debts, dependants, savings, workplace benefits and existing protection.

You will also discuss what financial effect a serious illness could have on your household.

Establishing your priorities

You will consider what you would want an accepted claim payment to achieve.

This may include repaying borrowing, meeting household costs or providing money towards treatment, care or changes to your home.

Considering affordability

Your adviser will discuss an amount of cover and policy term that reflect your priorities and the premium you can maintain.

Cover should reflect your budget and existing financial arrangements.

Researching available policies

Alexandra Hamilton can consider policies from a range of insurance providers available through its protection service.

This does not necessarily include every insurer or critical illness policy available in the UK. The scope of the service will be explained before a recommendation is made.

Explaining the recommendation

Your adviser will explain:

• The recommended amount of cover
• The policy term
• The premium
• The conditions covered
• Important policy definitions
• Exclusions or restrictions
• Partial or additional benefits
• What happens after an accepted claim
• The consequences of missing premiums
• Relevant cancellation rights

You will have an opportunity to ask questions before deciding whether to proceed.

Supporting your application

Your adviser can help you complete the application and respond to requests for additional information.

The insurer will make the final underwriting decision. The terms offered may differ from those initially illustrated.

Reviewing existing critical illness cover

Your protection requirements may change over time.

You may wish to review your cover after:

• Buying or moving home
• Remortgaging
• Getting married or entering a civil partnership
• Separating or divorcing
• Having or adopting a child
• Changing employment
• Becoming self-employed
• Taking on additional borrowing
• Experiencing a significant change in income
• Paying off your mortgage
• Changing your family or caring responsibilities

A review does not mean that your existing policy should automatically be replaced.

A new policy could cost more or provide different terms because of changes to your age, health or circumstances.

Do not cancel existing cover until any replacement policy has been formally accepted, has started and you understand its definitions, exclusions and conditions.

Critical illness cover advice across Essex

Alexandra Hamilton provides mortgage and protection advice from its head office in Clayhall, Essex.

Support is available to clients in Ilford, Romford, Brentwood, Chelmsford, Epping, Harlow, Basildon, Billericay, Colchester, Southend-on-Sea and other parts of Essex.

Appointments may be arranged by telephone, email or through an agreed meeting.

You can learn more about Alexandra Hamilton and its approach to treating customers fairly.

Support available from Alexandra Hamilton

Support may include:

• Reviewing your financial circumstances
• Identifying your protection priorities
• Explaining different types of cover
• Considering policies from a range of available providers
• Comparing policy definitions and limitations
• Explaining the costs and relevant risks
• Helping you complete the application
• Supporting you during underwriting
• Reviewing existing protection where appropriate
• Explaining when legal, medical or tax advice may be required

Mirza Sujon Baig, trading as Alexandra Hamilton, is an appointed representative of HL Partnership Ltd, which is authorised and regulated by the Financial Conduct Authority.

The guidance and advice provided through this website are subject to the UK regulatory regime and are primarily intended for consumers based in the UK.

Discuss your critical illness cover requirements

Understanding the available options can help you decide whether critical illness cover may be appropriate for your circumstances.

Contact Alexandra Hamilton to request a discussion about your protection requirements.

Completing an enquiry does not commit you to taking out a policy. A recommendation will only be made after your circumstances, needs and budget have been assessed.

Frequently asked questions

What does critical illness insurance pay for?

Critical illness insurance is designed to pay a lump sum if you are diagnosed with a condition covered by the policy, the diagnosis meets the required definition and severity, and the insurer accepts the claim.

Subject to how the policy is arranged, the payment can normally be used towards your mortgage, household bills, treatment, rehabilitation, home alterations or other financial needs.

Not every diagnosis will qualify. You should check the policy definitions, exclusions and claim conditions.

Does critical illness cover pay for cancer?

Many policies include specified forms and severities of cancer, but not every cancer diagnosis will qualify for a full payment.

Early-stage or less advanced cancers may not meet the main definition. Some policies provide a smaller partial payment for certain conditions.

The precise definition and required medical evidence will be stated in the individual policy.

Is critical illness cover worth having?

Whether critical illness cover is appropriate will depend on your mortgage, household expenditure, savings, employer sick pay, existing insurance and financial dependants.

You should also consider the conditions covered, policy definitions, exclusions, premium and whether you can maintain the cost for the intended term.

An adviser can assess your circumstances before making a recommendation.

Can critical illness cover and life insurance be arranged together?

Yes. Critical illness cover and life insurance can be arranged separately or within a combined policy.

With some combined policies, a successful full critical illness claim will end the policy. There would not normally be a later life insurance payment under the same policy.

Other policies may offer a different benefit structure. You should understand whether the arrangement provides 1 potential payment or separate benefits.

Can you claim critical illness cover more than once?

Many traditional policies end after the full insured amount has been paid, so a further full claim would not normally be possible.

Some policies include partial or additional payments that do not immediately end the main cover. A payment may reduce the remaining benefit, or the benefit may continue unchanged, depending on the policy.

The exact position should be checked before you apply.

Should you fail to disclose or misrepresent a fact, then you risk the insurer only paying part of a claim, declining to pay all the claim and possibly, declaring the policy invalid.