They solve different problems. Critical illness pays a lump sum if you are diagnosed with something on the policy's list. Income protection replaces part of your earnings for as long as you cannot work, whatever the cause.
A one-off, tax-free lump sum on diagnosis of a condition named in your policy — commonly cancer, heart attack or stroke. It pays whether or not you stop working, and plenty of people claim, recover and live for decades. It only pays for the listed conditions, at the severity the policy sets.
A monthly amount if illness or injury stops you working, typically 50–70% of gross earnings, starting after a waiting period you choose. Some policies pay for a set number of years, others until you recover, retire or the policy ends. The cause does not have to be on a list.
Income protection is written on own occupation, suited occupation or any occupation. Own occupation pays if you cannot do your own job and is the most protective. Any occupation only pays if you cannot do any job at all, which is far harder to claim on and cheaper as a result. Always check which one applies.
Two things account for most declined claims, and both are avoidable on the application form.
The first is something left off the application. It is rarely deliberate. People forget an old condition, or assume a bad back fifteen years ago is too small to mention. If you are not sure, put it down. Telling an insurer more than they need costs you nothing.
The second is claiming for something the policy does not cover, which is most common on critical illness, where only the specific conditions listed count and the lists differ a great deal between insurers.
Cover depends on the terms of the policy and on the accuracy of the information given when you apply.
Yes, and for a lot of households that is the right answer, with the amounts set so the total premium is one you can keep paying. Some insurers will combine them, though a combined policy commonly pays out only once.
Generally yes, and those are among the most common reasons people claim. What matters is whether you are medically unable to work, evidenced by your doctor. The label on the diagnosis is not the test.
No. Redundancy, resigning or losing a job for non-medical reasons does not trigger an income protection claim.
It is included with most life insurance at no extra cost and pays your life cover early if you are diagnosed with an illness expected to end your life within twelve months. It is the same money brought forward. Check what your life policy already covers before you pay anything extra for it.
Comparing these properly means reading the definitions as closely as the premiums, which is what whole-of-market access is for.
Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write. We will tell you honestly whether we can help.