Critical illness and your mortgage

How it works

Diagnosis of a covered condition triggers a lump sum, paid to you rather than to a lender, to use however you like — the mortgage, treatment costs, time off work, adapting a home.

It's not health insurance and it's not disability cover. It's a one-off payment on a defined event.

The definitions are the product

Policies list covered conditions and define each one precisely. A diagnosis that a doctor would describe as a heart attack or a cancer may not meet the contract's definition — severity thresholds, staging requirements and specific diagnostic criteria all appear.

Early-stage and less invasive cancers are frequently excluded or paid at a reduced amount. Read the actual definitions before buying, not the list of condition names.

Other terms that decide whether it pays

• A survival period after diagnosis before the benefit is payable
• Pre-existing condition exclusions
• Whether the policy pays once and ends, or covers multiple claims
• Whether a claim reduces an attached life insurance death benefit
• Waiting periods after the policy starts
• Whether cover ends at a stated age

As a rider or standalone

Critical illness is often added as a rider to a life policy. Check whether a claim reduces the death benefit — many accelerate it, meaning the money comes out of what your family would receive.

That's not necessarily wrong; it's simply different from additional cover, and it should be a decision rather than a discovery.

Whether it's worth it

It depends on what else you have. If you have solid disability coverage and an emergency fund, critical illness adds less. If you have neither, it's addressing a real gap — though disability cover generally addresses the income problem more directly.

Ask for the full definitions document before deciding. A seller who won't provide it has answered a different question.