Why cover?
  • affects 1 in 4 women / 1 in 5 men before retirement
  • 94.1% of the critical illness claims are paid
  • protect yourself and your family if you get seriously ill
Why us?
  • get the cover that will pay when you need it
  • save up to 35%, cover from £5 a month
  • free, fast and without obligation quotes
Insurers: Aviva, Legal & General, Liverpool Victoria, Scottish Widows, Vitality, Zurich

Critical illness insurance vs. life insurance: Which one should you get?

Insurance is about protecting against risk. Life Insurance and Critical Illness Insurance are actually very similar, but protect against different risks.

Life insurance protects against the financial loss brought about by a breadwinner’s death. Critical illness cover, on the other hand, protect against the financial loss brought about by being diagnosed with a critical illness.

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Protecting your family’s well-being if you are no longer able to earn

If you die or are diagnosed with a serious illness, you can no longer able to provide for your family. Or, if you are the designated carer of the family and the surviving spouse is working, the spouse may be forced to stop working to take care of the family or have to hire someone to do the spouse’s day-to-day chores or childcare duties.

Also, a death or a grave illness can have a huge financial impact on the family, aside from the loss of income. They may be left with funeral bills or hospital bills. The treatments for the illness may deplete your savings or other assets.

That is why life insurance and critical illness insurance are great ways to protect your family when tragedy strikes.

Life insurance vs. critical illness: comparing features and benefits

  Life Insurance Critical Illness Insurance


The insured receives a tax-free lump sum.

The insured receives a tax-free lump sum.

Control of funds

The beneficiaries have the discretion as to how they will spend the money. The Insured can allocate the percentage or amount each beneficiary will receive.

The insured decides how to use the funds. He can use it to pay for treatment, provide for adaptive equipment, cover day-to-day expenses and so on.


This is primarily bought:

  • To replace the lost income of the breadwinner for a specified number of years
  • To cover a high-ticket debt such as a mortgage
  • To cover end-of-life costs (funeral and burial expenses or hospital expenses)
  • To leave a legacy or inheritance to selected beneficiaries

This is primarily bought:

  • To fund treatment and recover in case of a critical illness
  • To replace lost income now that the breadwinner is unable to work due to his illness.
  • To cover a high-ticket debt such as a mortgage

Duration of payment

A one-time payment.

A one-time payment.

Basis for payment

Payments are based on the death of the Insured, regardless of the cause (except for excluded causes such as suicide or participation in a criminal activity)

Payments are based on diagnosis of a covered critical illness.

Ideal age for buying the product

There are providers that offer life insurance plans even late in life. Of course, the premiums would also be higher.

It doesn’t make sense for you to buy this at 60 years old or above, since some critical illnesses are only covered if the disease is diagnosed before the insured turns 60.

Life insurance and critical illness cover can be bought depending on your specific life and family circumstances. These products can be bought at the time when you need them.

Life insurance and critical illness insurance: pros and cons

  Life Insurance Critical Illness Insurance
  • Lower premiums
  • Higher maximum age
  • Provides a tax-free lump sum
  • Simpler claims requirements
  • A Living Benefit, one which you can enjoy while you’re living
  • Can provide a large amount you can use to recover from a critical illness
  • Provides a tax-free lump sum
  • A death benefit which your beneficiaries (not you) will enjoy
  • Higher premiums
  • You need to meet the definition of the critical illness for it to be payable
When you don’t need the product

You don’t need life insurance if you are single and have no dependents. At that point in your life, it is more advisable to avail of critical illness cover.

You don’t need critical illness insurance if you are past the age of 60 and you are concerned with specific diseases that are not payable over this age.

According to the standard definition provided by the Association of British Insurers, diseases such as Alzheimer’s, Motor Neurone Disease or Parkinson’s Disease are only payable before a specific age (usually pegged at 60).

The verdict

Actually, they’re two products that can complement each other to provide a more comprehensive insurance protection plan. You can get life cover and supplement it with a separate critical illness cover. Or, if you have budget constraints, you can consider a combined life with critical illness cover. Know more: Combined life and critical illness insurance: Is this a better deal?

Want to know about other insurance products to make your insurance plan more comprehensive? Here are some to think about:

Last updated on: 18.1.2013

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