Critical Illness cover pays out a lump sum or regular income to replace lost income or to cover additional costs incurred if you were diagnosed with one of many defined serious illnesses. You can also add to your policy limited Critical illness cover for your children up until they reach 18 as if they are ill, you would perhaps want time off work to care for them at such a tough time and this would result in an income loss.
Most companies cover 'the big three' – cancer, stroke and heart attack although many cover for upwards of 30 different illnesses including in some cases 'Total and permanent disability'. This should not be confused with Terminal Illness Cover – often provided free with life insurance
If you suffer a critical illness listed in your policy summary, it pays out on diagnosis, this could be the loss of a limb, going blind, etc. In many cases you may live for many years after diagnosis. Take a look at the Association of British Insurers website for more information on the types of illnesses covered.
Again the number of illnesses covered varies from provide to provider. Generally the more you pay, the more you are covered for. When comparing protection policies the price should be secondary, the cover provided however is paramount.
A fantastic indication of the quality of cover is the Defaqto rating of the policy. Defaqto are an independent company who compare providers to rate the effectiveness of their products; check out www.defaqto.com for more information.