Critical Illness insurance is like Life Insurance in a way.  You know life insurance pays out if you die?  Critical Illness insurance pays out if you come quite close to dying, but you don’t  – so it pays out a lump sum if you are still alive.

This can be very handy, 9 times as many people could claim on critical illness insurance as life insurance, so you can imagine, alot of people decide they want this style of cover.

So, what is covered?

Well, that is the subject of the quiz. And to make it easier I’ll make it multiple guess.

a) 7

b) 23

c) 39

d) 154

The correct answer is …. it depends who you ask.

7 is the number of definitions the Association of British Insurers (ABI) says are ‘core illness’ that must be covered in a Critical Illness policy

23 is the number of illness the ABI have given standard definitions – almost all policies include these 23 illnesses.

39 is about the maximum number of illness you could expect available on a normal critical illness policy (the range is 30 – 39) You have to be a little bit careful about just looking at the number though – sometimes the insurance companies pad things out with really obscure illnesses so it doesn’t follow that a policy with 35 policies is tangibly worse than one with 36.

154 is the number of illness covered on Prudential’s new ‘serious illness cover’ – you should see the marketing literature – it’s based on the old ‘best man’s gag’ where he reads out the messages and a roll of paper unravells…

So, if you are thinking of buying critical illness cover, it would make sense to ensure your adviser (if for some crazy reason your adviser isn’t me!)  is including the Prudential policy in his comparisons – they have 2, one covers 154 illnesses, the other 93.

They are much cheaper than you’d expect.