How Much Critical Illness Cover Do I Need?

The majority of us can’t afford to live for sustained periods without a regular salary, so if we get diagnosed with a serious illness that leaves us unable to work, this could leave us and our dependents in a precarious situation.

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The majority of us can’t afford to live for sustained periods without a regular salary, so if we get diagnosed with a serious illness that leaves us unable to work, this could leave us and our dependents in a precarious situation. To help mitigate this risk, Critical Illness Cover can help. This kind of insurance policy provides financial protection to you with a lump sum payout if you are struck down by an illness or serious condition that leaves you unable to work. In such a scenario, this payout can provide temporary financial relief for the bills, mortgage and other living expenses that will still need to be paid.

A key question however will be how Critical Illness Cover do you need? Just as you don’t want to purchase too much and overspend on monthly premium payments, neither do you want to purchase too little and be left without enough of a financial lifeline when you need it most. Here we look at what to think about when deciding how much Critical Illness Cover you need.

Do I need critical illness cover?

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The first thing to decide is do you need critical illness cover in the first place? There are a few things to think about. Indeed if you were diagnosed with a critical illness, it may well be the case that in addition to the emotional stress for you and your loved ones, you might have to worry about your financial needs also. With this in mind, think about:

  • Will you still be able to work and earn an income?
  • Will you incur travel expenses to receive treatment?
  • Will you have to make alterations to your home due to an illness?
  • Will you have to employ people to help you do the things that you are no longer able to do?

A payout from critical illness cover will go some way to meeting these expenses so you can focus on your health and your physical recovery.

One should also think how you and your family would cope if your partner developed a critical illness. Whilst many look at obtaining an individual policy one could also consider a joint critical illness policy with your partner, and even a family policy to include your children.

How much do I need?

Whilst there are maximum limits and minimum limits of Critical Illness Cover available, the amount you can choose will lie anywhere in between. What this sum is completely depends on your own situation, budget available and the level of cover you want.

The amount of critical illness cover you need to take out should be calculated in line with the number of dependents you have, your income, your current debts and any other outgoings. Also, you may have purchased critical illness cover because you’d like the option of private medical treatment if ever you were diagnosed with a critical illness, rather than having to rely on public healthcare. If you are looking for cover to treat a specific illness, do bear in mind that each insurer will cover different conditions, and the more conditions covered, the higher your premium payments are likely to be.

For many, their starting point is to aim for a lump sum that is equivalent to the level of life cover they have purchased. However, that can prove expensive, so it might be better to reduce the level of critical illness cover to something more affordable. After all, some critical illness cover is better than none at all.

Someone with a mortgage, dependents, credit cards and other debt are more likely to need cover than someone single with no children and who is debt-free. Your income levels, access to capital and whatever additional income you might receive from pensions or investments is also an integral factor in deciding your policy limits.

Monthly expense and future needs

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A good jump-off point is to calculate your monthly expenses. In addition to your monthly expenses, it’s also useful to add an additional lump sum to that so that in the event of being diagnosed with a critical illness, one receives an extra amount of capital that can be used for any purpose.

For a general idea of what you should be thinking about budget-wise, one might take the following outgoings plus additional needs, whilst subtracting for any other possible income, assets and benefits:


  • Do you have a mortgage? If so, how much is outstanding?
  • Have you any other debts? How much is owed?
  • Amount your family will need to live on and pay all the bills?

Additional Needs:

  • Will you want funds for private medical treatment?
  • Estimate potential medical expenses (e.g. care home)
  • Future provisions for your partner, children and any other dependents


  • Partner’s Income
  • Savings and other assets
  • What state benefits do you currently receive, or what are you likely to get in the future?

Once you have calculated the above you will have a fairly clear idea of what sort of lump sum you will require for you and/or your dependents to continue the same quality of life in the event of you receiving a critical illness diagnosis.


When deciding how much cover you need to start with, it’s also worth bearing inflation in mind. It would be awful to start a policy now and claim on it in 15 years time only to find that it just doesn’t have anywhere near the buying power that you hoped it would have, just when you need it. You can help offset the effect of inflation by including an ‘indexation option’ when you first set your plan up.

The indexation option helps to ensure that the benefits payable from your plan keep in line with inflation over the term of your policy to help maintain the buying power of the amount paid out.

If you’re struggling to calculate your regular expenses and debts or unsure as to how to make accurate estimations, you can reach out to experts in this area who will be able to fully guide you through the process.