Critical Illness (CI) insurance pays out a lump sum if you suffer one of a number of specific medical problems, such as a heart attack, cancer or stroke. However, it doesn't pay out for any medical condition, other than those listed. Although the trade body the ABI has a suggested list of diseases a policy should cover, insurers are free to offer their own variations. Also, the latest list is new so many insurers will be changing their polices during 2006 and 2007.
Critical illness would not usually pay out for stress, depression or back problems; where as a full Income Protection policies cover all three. Unlike many other health and protection insurances, policies pay out on diagnosis of the critical conditions covered, regardless of how well or quickly you recover.
On a Life policy you have to die before a payout. On a Critical Illness policy you will get a payout whether you live or die.
Types of cover: Index
