This type of protection (also known as 'dread disease cover' or 'serious illness cover'), covers you against a number of serious illnesses, medical conditions and diseases. It pays out a tax-free lump sum on the diagnosis of one of the critical illnesses specified in the policy details. Common conditions covered are heart disease, stroke, renal failure, cancer, paralysis, major organ transplant and coronary artery bypass surgery.
This one-off lump sum is designed to help you adapt to a major life-changing illness. For example, you may need to undertake training for a different occupation or adapt your home or car. If critical illness cover is included in your mortgage protection plan, your mortgage will be repaid, taking this financial burden away from you.
As the policy is intended to cover living expenses, there may be a requirement that you survive for a minimum specified period (14 - 28 days) following the date of diagnosis, in order for the policy to pay out.
