"1 in 3 people in Britain will be diagnosed with cancer at some point in their life" (Source: Imperial Cancer Research Fund 1999).

A critical illness policy normally pays out a tax free lump sum on the diagnosis of certain specified critical illnesses. Most policies will pay out following the diagnosis of heart disease, stroke, renal failure, cancer, paralysis, major organ transplant and coronary artery bypass surgery as well as a range of other conditions. Over recent years the number of diseases covered by a typical policy has increased to more than 25. One normally has to survive 14 days after the diagnosis of a serious illness to ensure payment.

With rapid medical advances the chances of surviving a major illness are greater than ever however the financial consequences of suffering a major life changing illness can be very substantial. The one-off payment from this type of policy is designed to help you cope with these costs which will typically include the need to adapt your home or car and/or undertake training for a different occupation.

Critical illness cover may be taken out on its own or included in ones mortgage protection policy to remove ones mortgage payments from your affairs should one suffer such an illness. If one has a mortgage policy it may be advisable to have a separate ‘stand alone’ policy to make sure that in addition to ones mortgage being paid off one has enough money to cover the above costs.