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. 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.
A claim can be declined because something was left off the application. If you are not sure whether a condition matters, put it down. Telling an insurer more than they need does not count against you.
A claim can also be declined because the policy does not cover it. On critical illness only the conditions listed count, and the lists differ between insurers.
Cover depends on the terms of the policy and on the accuracy of the information given when you apply.
An own-occupation policy pays if you cannot do your own job; an any-occupation policy pays only if you cannot do any job.
Yes. Set the amounts 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, where your doctor confirms you are medically unable to work.
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.
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Independent Financial Adviser
Independent Financial Adviser
Your first call is with an Account Manager and is at no cost to you. 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.