UK critical illness cover

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Critical illness insurance (UK) is not just general insurance; it’s a specific financial safety net tailored for the contractor sector and those who run their own limited company. For these individuals, if illness strikes, work stops, and so does the income; therefore, UK critical illness insurance is an important consideration. Unlike PAYE employees, who have the luxury of receiving either contractual or statutory sick pay, contractors need to implement their own financial safeguards to protect themselves, their loved ones, and their day rate. This is where critical illness insurance for contractors’ cover steps in. A key thought is UK critical illness cover offers unique benefits that cater to the specific needs of contracting professionals. Therefore, where can you find the best critical illness cover for UK contractors?

Imagine the overwhelming financial burden if you were to suffer from a debilitating illness or injury and couldn’t work for several months. Your mortgage and day-to-day household bills would still need to be paid, and you might need additional funds for treatment, medicine, or even home modifications. UK critical illness cover is your safety net, providing crucial financial support in the face of unexpected illness or injury.

To get a Critical Illness quote or find out more about critical illness insurance, simply click on the button below

Initial thoughts on UK critical illness cover 

Some feel because they are fit and well now, it’s improbable that they’d ever need this type of cover. Sadly, the statistics tell a different story.

The truth is that approximately 1 in 5 men and 1 in 6 women will suffer a long-term illness in their lifetime. It’s shocking to note that the average age for critical illness claims in the UK is only 47 years old. According to the FCA’s Thematic Review, up to 40% of the UK’s small to mid-sized businesses may be underinsured.

It’s not just a good idea, it’s a prudent move to give yourself the same protections as your PAYE counterparts. With UK Critical Illness cover, you’ll have peace of mind that should you become ill or injured, money won’t be a concern. You can focus all your energy on getting better, knowing that your financial security is taken care of.

How does Contractor Critical Illness cover work? 

When considering the definition of critical illness (UK), the insurance industry defines certain conditions as ‘critical illnesses.’ These tend to be serious, sometimes life-threatening conditions, including heart attack, stroke, and cancer. A UK critical Illness insurance for contractors’ policy will provide the policyholder with a tax-free payout on the diagnosis of a condition listed on the policy.

Different providers offer differing levels of coverage. However, the golden rule is that the more conditions you cover, the higher the monthly payments. It is always worthwhile to discuss this type of policy with a whole-of-market financial adviser who specialises in the contractor sector. Please complete the form at the end of this guide to find out more.

Under critical illness insurance for contractors, you receive a large, one-off payment if you become ill, allowing you to focus on your recovery rather than money worries. The cash payout is tax-free and can be used for anything you wish. Commonly, claimants use the lump sum to pay their mortgage and regular bills. Furthermore, with serious illness or injury, you may require medical treatment. Also, you may need to make home modifications, such as a ramp or a lift, to increase accessibility. Crucially, you’ll have the reassurance that at a difficult time, you won’t need to worry about money.

There is no ‘deferral period’ on a Critical Illness policy, so a claim can be made on a diagnosis. However, depending on the specifics of your policy, you may need to survive for at least 10 to 30 days after your diagnosis before the policy will pay out. Once the policy has paid out, it ends.

What conditions does best critical illness insurance cover? 

If you are a contractor, what conditions does critical illness cover? When we consider taking out cover, critical illness policies depend on which illnesses are included. Each insurer that provides UK critical illness cover lists which specific medical conditions it covers. When you search for the best critical illness cover, they will also state how severe the condition must be.

Please note that the conditions listed vary by provider. Therefore, it’s essential that you fully understand the scope of the policy you are considering. A Critical Illness policy should cover the most serious conditions. Here is an example of which conditions the contractor Critical illness insurance cover (UK) policy might include:

  • Stroke.
  • Heart attack.
  • Different types and stages of cancer.
  • Coronary artery bypass.
  • Kidney failure.
  • Major organ transplant.
  • Multiple sclerosis.
  • Critical illness disability insurance -some insurers will also provide Critical Illness UK cover for a permanent disability due to injury or illness.

The benefits of UK critical illness insurance for contractors 

A UK critical illness insurance policy has many different benefits for UK Contractors. These include:

  • With UK critical illness cover, you receive a tax-free lump sum payout as soon as you are diagnosed with a critical illness or have an ongoing disability.
  • You can use the UK critical illness cover policy payout however you wish. For example, a steady income if you cannot work helps you pay (even clear) your mortgage and keep up with your household bills. Moreover, you can also use the payout to make adjustments to your home. For example, this will include a wheelchair ramp or a stairlift.
  • Unlike income protection and relevant life insurance, you will have to pay for contractor critical illness cover out of your post-tax income. However, the payment will be tax-free if you make a successful claim on your critical illness insurance (UK)
  • You can tailor your policy to cover you for a fixed term (e.g., until retirement) or for ‘whole of life’.
  • Additionally, the lump sum you’ll receive will protect your savings as you won’t need to dip into them.
  • A UK critical illness cover policy covers you for several different medical conditions.
  • The Critical illness policy gives you peace of mind. You and your family will be financially secure whatever the future has in store.

Please note that UK critical illness cover is not affected by your ability to continue working. Furthermore, it is based on the illness listed on your policy and the severity of the condition. 

What is not covered under critical illness insurance (UK)? 

It’s important to know that UK critical illness cover won’t cover you for all illnesses, and it won’t pay out if you die. To make a successful claim, your condition must be included on your insurer’s list of definitions of serious illnesses. These vary by insurer, and in some cases, the insurer may only pay once your illness hits a certain level of severity. It’s always advisable to speak to a financial adviser to ensure you choose the right policy. Our form below will put you in touch with specialist financial advisers.

Critical illness covers pre-existing conditions -most UK critical illness insurance providers will not cover any pre-existing conditions you had before taking out the plan. A small number of insurances may consider covering a previously diagnosed illness, but these are few in number, and the premium would reflect the increased risk.

This policy type takes into account your age, medical history, your smoker status, the type of job you do, and the length of cover required. For example, if you smoke, your premiums will be considerably higher.

As a professional with your own contractor limited company, it is vital to consider a contractor’s critical illness policy. If you are looking for UK critical illness cover, it’s best to speak to a specialist contractor financial adviser.

To sum up, the best critical illness insurance will provide peace of mind if you are diagnosed with a severe illness. As a result, you will have protection for your family.


Besides this guide on the best critical illness cover (UK), we have other extensive financial guides for contractors. These cover both Contractor Mortgages and contractor insurance in general. In addition, we have a guide about Relevant Life Insurance for limited company contractors.

Download their Guide to Insurance for further information on Critical Illness Insurance for directors and contractors.

To obtain a quote or learn more about UK critical illness cover, please complete the form below. Our trusted partner, Broadbench, will contact you with further details.

Find out more about critical illness insurance

Critical Illness
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Frequently Asked Questions

It is worth noting that there is no cash-in value to critical illness cover UK if you do not use it. Therefore, you will not be able to claim your payments back if you never make a claim.

A critical illness cover UK payout will be either the full sum assured or a percentage based on the severity, if you were to contract an illness covered under the plan.

Each insurer will have a list of what specific medical conditions that they cover. In addition, they will also state how severe the condition must be. Some examples of what the Critical illness insurance policy covers includes are a stroke, a heart attack, different types and stages of cancer, Coronary artery bypass, kidney failure, major organ transplant, multiple sclerosis. Some insurers will also cover permanent disability as a result of injury or illness.

As long as your condition meets the definition within the policy the payout can be immediate. There could also be a slight delay of up to three months in some cases.

Published On: April 6th, 2024 / Categories: Finances, Finances post, Financials /

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