African American woman talking on mobile phone and using laptop.

What is the difference between Terminal Illness and Critical Illness?

Many people get confused between Terminal Illness and Critical Illness, thinking that it is the same, but there are several fundamental differences.

What is Terminal illness?

An Insurer defines a Terminal Illness, as an illness from which you will not recover, and are likely to pass away within a period of 12 months. Most life insurance policies include Terminal Illness cover. This means that they will pay a claim to the policyholder if they are diagnosed with a condition which they are very likely to die in the next 12 months. This allows the policyholder to take care of their personal affairs before they pass away.

What is Critical illness?

A Critical Illness is an illness which you could well recover from, and even return to normal life afterwards.  The conditions that are covered vary from insurer to insurer, but most providers will cover critical illnesses such as Heart Attack, Stroke, Advanced Cancers, Multiple Sclerosis, and permanent blindness and deafness.

Critical Illness is not automatically included with life insurance. It is an optional extra which incurs an additional cost.

It allows you the opportunity to protect yourself against conditions such as Heart Attack, Stroke and advanced Cancers, collectively referred to as ‘Critical Illnesses’.  These conditions can have a dramatic effect on your life. Meaning that you are unable to work and continue to make mortgage repayments or meet other essential financial commitments.

It may also mean that you need specialist medical care. For which you could be waiting a long time on an NHS waiting list. The cover would pay out a lump sum, or provide an income if you opted for a Family Income Benefit policy. , if you were diagnosed with one of the specified critical illnesses listed under the terms and conditions of your policy.  This document would be included with your policy documentation.

What is covered under a critical illness policy?

Critical illness policies vary from provider to provider, however, most insurers cover between 40 and 50 conditions. For a list of some of the most common conditions which are covered visit our Critical Illness page. It is important to get expert advice when deciding which critical illness policy is best for you.

Due to the tax structure of Life insurance and Critical Illness cover, it is actually cheaper to have the two combined into one policy rather than having a ‘stand-alone’ critical illness policy (no life cover included)

The levels and bases of taxation, and relief from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Next steps

Whilst you are welcome to get a quote online but we would recommend you talk to one of our advisers.

Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!

An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Please feel free to read our Independent client reviews.