Critical illness cover

Critical illness insurance is designed to pay a tax-free lump sum on diagnosis of certain specified illnesses. Policies vary in what they cover but almost all policies should cover cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. They also usually pay out if a policyholder becomes permanently disabled.

Basic critical illness policies will cover at least these conditions, while a more comprehensive plan will cover many more including loss of sight and loss of hearing.

No, unfortunately not. At present if someone has tested positive for HIV they won’t be able to take out a critical illness policy.

Some people will have taken out a critical illness policy at a time before they had tested positive for HIV. In this situation it is not necessary for the policyholder to inform the insurer that their health status has changed and even if they do, the insurer cannot change the policy nor increase the premiums as a result of the diagnosis.

However, some critical illness policies exclude HIV and so won’t pay out on its diagnosis. To find out whether an existing policy covers HIV or not, check the conditions and exclusions. Some critical illness policies cover HIV, some exclude it and some will only pay out if the virus was contracted from a blood transfusion, physical assault or was work related (for example, for nurses or police officers), but will not pay out if contracted from unsafe sex.