In today’s evolving protection landscape, Critical Illness Cover (CIC) often takes a back seat to products like Income Protection, not because it’s less important, but because its role can be misunderstood or under-prioritised.
In this week’s Friday Focus, IFA Magazine’s Insurance & Protection team delves into the growing importance of critical illness cover (CIC), examining its role deeper through industry experts own knowledge.
Tim Lewis, Senior Propositions and Commercial Manager at Zurich UK said: “Critical illness cover is a key but often underestimated pillar of financial resilience. While most people think of life insurance first, CI cover provides essential support when someone faces a serious health setback. It helps bridge the gap, covering unexpected costs like medical bills, lost income, or changes to daily life, helping to ensure families stay financially secure even during tough times.
Financial advisers are increasingly weaving CI cover into broader discussions about protection, showing clients how it complements other policies and long-term plans. When advisers explain the real-life risks and benefits, clients are more likely to appreciate its value and make informed choices. We’re seeing sustained high levels of claims for conditions such as cancer and heart disease, and insurers are seeking to innovate. Recent product developments we’ve made include flexible, modular options, additional payouts for early-stage illnesses, digital tools with CI Expert that make CI cover easier to understand and more affordable, and innovations in children’s cover.
The real-world impact speaks volumes. CI policies have helped people access quicker treatment, adapt their homes and ease financial pressure while recovering. These stories highlight why CI cover deserves a bigger spotlight in financial planning – the policies offer peace of mind when it matters most.”
Ed Durell, Managing Director, CoverDirect comments:
“I am not sure or convinced that Critical Illness Cover is overlooked, but I do understand it may be under-prioritised. I think there may be a case for brokers often viewing it as Critical Illness Cover vs Income Protection, or put simply, have one or the other. I do not view it in that way at all; they can be used in isolation and together, but importantly, for varying situations.
The fact is, that it’s all about customers understanding, understanding their concerns, their risks, the impacts and brokers helping them understand what the impacts may mean. What would the impact be of being unable to work? Why would that happen, or in what situations could that happen? Equally, what would the impact be of getting critically ill, differing severities, and different conditions and what would need to change?
We see it all the time, and I also talk about it a lot. One person’s risk appetite and worry around CI versus another person’s is nearly always different. Hence the need to understand, to consider, to have an experienced broker to help discuss it all, listen and make it real to you in your environment/situation.
We all know the stats on becoming critically ill; we can consider the wider effects and impacts, but we can also look to measure the financial impact. So, of course, it is an essential part of financial resilience. However, understanding your own concerns, risk appetite and possible actions/cover available is the key.
Advisers can take the time to better understand and discuss impacts. Having a well-structured, facilitated discussion really helps make it clear what CIC means to each person/family.
Cover upgrade promise remains my favourite product design. As conditions are understood better, definitions changed or updated, cover is upgraded, and it is applied to all policies, not just new ones.”
Justin Harper, Chief Marketing Officer at protection advice specialist LifeSearch:
“While initial protection conversations often centre on life cover, the reality is that clients are far more likely to experience a serious illness than die before retirement. Advisers can help clients understand their personal risk profile using LV=’s risk reality calculator – https://riskreality.co.uk/gen – it’s free to use and can provide a simple, tailored report designed to help talk about the relative risks they face.
Medical advances mean survival rates are improving, but the financial fallout from illness can still be devastating. Take the alarming statistic that one in two of us will suffer from cancer in our lifetime. Macmillan reports that four in five people living with cancer experience an average loss of nearly £900 a month due to reduced income and higher costs, a reminder that financial resilience must cover illness as well as death.
Clients are increasingly open to discussing serious illness, particularly as many have seen friends, family or public figures affected. Advisers can build on this by reframing the conversation around “what if” scenarios, not just who would pay the mortgage if they died, but what would happen if they couldn’t work through illness.
The growing flexibility in critical illness (CI) products also allows advisers to tailor cover to life stages – such as new additions to the family, or adult children becoming more financially independent, making it easier to adjust and integrate CI into holistic, evolving financial plans.
We’ve seen rising awareness around the financial impact of illness, reflected in more clients choosing standalone CI cover or combining it with income protection. Claims data show that cancer, heart attack and stroke continue to dominate payouts – they account for more than 90% of all CI claims, underlining the relevance of CI in real lives. Meanwhile, improved transparency around claims (beyond claims stats) can help clients understand not just what’s covered, but why they need it.
Recent years have brought real innovation, with insurers moving away from simply adding more conditions towards severity-based models that pay out according to the impact of the diagnosis. Options to add, remove, or adjust cover make it easier for advisers to tailor policies as clients’ lives evolve. Partial additional payouts for early-stage conditions, alongside comparison tools like CIExpert, are improving affordability, comparability and confidence in adviser recommendations.
We regularly see how CI cover transforms financial outcomes for families. In 2024 alone, insurers paid out over £23 million in CI claims to 471 of our LifeSearch customers. The earliest claim was for a critical illness policy, where the policyholder submitted their claim just 29 days after they took out their cover.”
