Life, income or critical illness cover — what is the difference?
By Aditi Sinha · Reviewed by Seema Babber
· 5 min read
Quick summary
- Life insurance pays out if you die, critical illness cover pays a lump sum if you’re diagnosed with a specified serious illness, and income protection pays a monthly amount if you can’t work.
- Many households combine them.
Life insurance
Pays a lump sum to your family if you die during the policy term. Often arranged to match the mortgage balance and term.
Critical illness cover
Pays a lump sum on diagnosis of a condition listed in the policy. Definitions vary between insurers.
Income protection
Replaces part of your income, usually monthly, if illness or injury stops you working, after a waiting period you choose.
Policies have exclusions and conditions. Cover may not pay out in every circumstance.
Sources
MoneyHelper — insurance
Written by
Aditi Sinha · Mortgage & protection adviser
Aditi helps buyers understand their options in plain language, and reviews protection needs alongside the mortgage so nothing is left to chance.
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