Critical Illness Cover (CIC) is a type of insurance that pays out a tax-free lump sum on the diagnosis of a specified illness or medical condition during the term of the policy. It can be taken out as a standalone policy but is more often added on to a life insurance policy as an extra layer of protection.

This type of plan is designed for those individuals or families who want a lump sum if they are diagnosed with a serious illness. As an example of where this lump sum could be used is to repay a loan, mortgage, or perhaps pay for time off work. The lump sum could even be used to pay for any necessary alterations to your home.

The quality of cover and the illnesses covered can vary significantly between different providers.
The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, the cover will lapse.

The policy may not cover all definitions of a critical illness. Always read the small print of your policy and check which conditions are covered and which are excluded.

Critical illness cover is normally cheaper when taken alongside a life insurance policy. There is normally only one payout. So, if you claim for a critical illness, you would not receive a further payout on death.

Critical illness polices stop providing cover if you stop paying the premiums. There is no cash value to critical illness cover, so you do not get any money back if you survive to the end of the term or stop the policy part-way through.