Critical illness insurance entitles the policy holder to receive a lump sum cash payment in case the policyholder is affected by any one of the critical illnesses listed in his/her insurance policy. There are also specially designed policies that provide regular income and also for major operations such as organ transplants.

Almost all the policies require a survival period, which means that the policyholder has to survive a minimum 28 days or 30 days from the time of diagnosis. However, this requirement varies from companies to companies. The contract terms also include specific rules that define when a diagnosis of a critical illness is considered valid. Also, the diagnosis need to be made by a physician who specializes in that illness or condition, or it may name specific tests to confirm the type of illness.


The critical illness policy can be purchased as a separate policy or as part of a life policy such as level term assurance, mortgage protection or a usual life insurance policy.

Critical illness can strike at any time and the policy is designed to pay out on diagnosis of a specified condition to provide financial security in times of urgent needs related to health. The proceeds from the policy are tax free.

However, premiums are more expensive compared to usual life cover. Comparing polices from different companies is difficult because terms and conditions can differ extensively. Medical confirmation will be required and also a medical diagnose for those in bad health or those need considerable levels of cover.
The following are some of the cheapest critical illness insurers in the UK.

• HSBC Life Insurance
• Legal & General Critical Illness Insurance
• Lloyds TSB Life Insurance
• Natwest Life Insurance
• Prudential Life Insurance
• Scottish Widows Critical Illness Cover
• Standard Life Critical Illness Insurance
• Tesco Life Insurance
• AA Life Insurance
• Bupa Life Critical Illness Insurance
• ASDA Life Insurance
• Aviva Decreasing Term Life Insurance
• Aviva Level Life Insurance
• BUPA Life Insurance
• Friends Provident Critical Illness Insurance