A record £6.8 billion was paid out in individual and group life insurance, income protection and critical illness claims in 2021, according to the latest figures from the Association of British Insurers (ABI). More than £1.2 billion was paid out to critical illness claimants and over 18,000 new claims were paid.

Critical illness cover provides a tax-free cash lump sum in the event of a diagnosis of a covered illness. This benefit can assist with covering day-to-day expenses and costs, allowing you to prioritise your recovery, health, and wellbeing. The average claim payment amounted to £67,500 according to the ABI – and yet according to the Financial Conduct Authority (FCA) in 2020, only a small percentage of UK adults (14%) has this type of protection insurance.

The leading insurers report that cancer is responsible for the majority of all their critical illness claims. Cancer Research UK states that, there are around 375,000 new cancer cases in the UK every year, that's around 1,000 every day, although the cancer survival in the UK has doubled in the last 40 years with 1 in 2 people being diagnosed surviving the disease for ten years or more.

This means that there are 20 times more new diagnoses of cancer each year than people who receive critical illness pay outs, conceivably because relatively few people have this type of cover.

Alex counts himself of one of the fortunate ones, because he had the foresight to take out critical illness cover. He says, “Anybody who is thinking about getting critical illness cover or looking for excuses not to do it – speaking to me for 15 minutes will change their mind, because it does make a difference.”

He had always considered himself a fit and healthy person who led an active and busy life, self-employed and working 60 hours a week, when he was diagnosed with colorectal cancer at the age of 66.

Alex said that it was his intention was to work until I was 70 and then retire, but due to the resulting surgery he underwent it became clear that whatever happened, he wasn’t going to be able to work again as he was going to have to wear a colostomy bag. So that’s when he decided to claim.

Alex says that “This payment has aided me financially and that’s putting it mildly. Being self-employed and having not been able to work to full capacity since June 2017, means no money. There are other things too, things people don’t think about – contracts for TV, mobile phones, broadband, monthly outgoings and so on. All those things you don’t think about. For your income to fall or suddenly stop due to being ill, it can be very very difficult.”

For Alex the surgery was successful, and they managed to remove all the tumour with the cancer not spreading any further and he is doing well - with his situation being made a whole lot more manageable and easier to cope with being aided financially because of his critical illness cover.

If you’re unable to work due to a serious illness, you might assume that your employer will continue to give you some level of income, or that you’ll be able to rely on benefit payments.

In reality the Money and Pensions Service, sponsored by the Government Department for Work and Pensions, asserts that employees are usually moved onto Statutory Sick Pay within six months and that state benefits might not be enough to replace your income if you’re no longer able to work.

If you qualify, Employment and Support Allowance ranges from £74.70 a week to a maximum of £113.55 a week (2021/22 figures).

The Money and Pensions service make known that if you and your family depend heavily on your income, you don’t have enough savings to tide you over if you become seriously ill or disabled and you don’t have an employee benefits package to cover a longer time off work due to sickness, then you should consider critical illness cover.

Realising that for some people this type of policy may seem complicated or difficult to understand, they also recommend that the best way to get what you need is to get advice from specialist broker.

Here at Essential Insurance, we are protection specialists, experts at what we do, protecting our customers in case the worst happens, and we arrange critical illness cover to suit the individual needs of thousands of people every year. We carefully explain the details of the various policies available to all our customers and provide advice to make sure that each person gets the right type of policy for their needs.

For further advice about critical illness cover, please do not hesitate to get in touch and speak to one of our advisors today on 0800 612 8005, and we’ll help you get the right cover to protect you.

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Thanks to AIG Life 
for sharing Alex’s story.