How much critical illness cover do I need?

Critical illness cover pays a tax-free lump sum if you are diagnosed with a serious condition that meets the policy’s definition.

Not sure what that includes? Our guide on what critical illness cover actually covers explains it. This article is about the amount.

---

Start with time off work

Recovery from a serious illness can take months, sometimes longer. During that time, your pay may drop sharply.

Check what your employer would pay if you were off sick, and for how long. Then estimate how many months your household would struggle to cover the bills.

That gap, multiplied by the months it might last, is the core of your figure.

---

Add the costs that come with illness

Serious illness often brings extra costs: travel to appointments, help at home, childcare while you recover, or changes to the home.

Some people also want the option of private treatment or a second opinion. These are choices, so include them only if they matter to you.

---

Decide what to do about the mortgage

Some people set critical illness cover to clear the mortgage, so their housing costs disappear while they recover.

Others choose a smaller amount and keep the mortgage running. Clearing it costs more each month, but it removes the biggest bill for good.

There is no single right answer. It depends on your budget and how you would feel facing a mortgage payment while unwell.

---

Take off what you already have

Savings, sick pay from work and any existing policies all reduce what you need. If you have income protection, which pays a monthly income if you cannot work, your lump sum can often be smaller.

Critical illness cover and income protection work well together. One pays a lump sum on diagnosis, the other replaces income for as long as you cannot work.

---

How we arrange critical illness cover

We arrange critical illness cover alongside life insurance, rather than as a standalone policy. Our calculator works out your life cover and lets you look at critical illness as an option, so you can see the two together.

Claims can be declined if a condition does not meet the definition or information was not disclosed. Our guide on why critical illness claims get declined explains how to avoid that.

---

Frequently asked questions

How much critical illness cover should I get?

Start with how many months your household could struggle while you recover, add the extra costs that come with illness, decide whether to clear the mortgage, then take off savings, sick pay and existing cover.

Should critical illness cover pay off my mortgage?

It can, and that removes your biggest bill while you recover. It costs more each month, so some people choose a smaller amount and keep the mortgage running.

Is critical illness cover the same as income protection?

No. Critical illness cover pays a lump sum on diagnosis of a listed condition. Income protection pays a monthly income if you cannot work due to illness or injury. Many people have both.

Is a critical illness payout taxed?

A payout from a personal critical illness policy is normally paid tax-free.

Can I buy critical illness cover on its own?

Some insurers offer it on its own. We arrange it alongside life insurance, so both are set up together.

Related reading

• What critical illness cover actually covers
• Critical illness cover explained
• Why critical illness claims get declined
• How much life insurance do I need?