What critical illnesses does business critical illness insurance typically cover?

Critical illness cover policies pay a lump sum to an employee if they're diagnosed with a serious illness covered by the policy. You can buy critical illness insurance for all your employees by investing in a group policy and paying the monthly or annual premium. Each policy includes a list of conditions, and you can increase the critical illness coverage your policy provides by paying a higher premium to access enhanced coverage. Some providers also let you add employees' partners or provide children's critical illness cover.

Critical illness cover typically has a survival period of around 14 days, meaning employees can't claim within 14 days of joining the policy. You can also choose between decreasing and level cover, and decide when the policy ends. For example, you might choose a date that matches an employee's intended retirement date.

The lump sum payment is tax-free, and your employees can use it for any purpose, depending on their circumstances and the nature of their illness.

Critical illness cover provides financial protection for serious illnesses and surgery. Insurers differ in the coverage their critical illness insurance policies provide. Still, they all follow the Association of British Insurers (ABI) guidelines, which set out the minimum coverage a critical illness insurance policy must provide. Each policy's terms and conditions will set out the policy definition of each condition, along with any relevant time limits or diagnostic criteria that apply. The definitions that apply to different conditions typically require a diagnosis based on symptoms, clinical testing data, or both.

Here are the main conditions you'll find on every critical illness insurance policy and the policy definition that will likely apply.

Heart attack

ABI guidance describes heart attack, stroke and cancer as essential elements of critical illness cover. A successful claim requires a diagnosis of acute myocardial infarction, leading to death of the heart muscle. It also includes diagnostic criteria to confirm whether the attack meets the severity level specified in the policy. Critical illness cover for heart attacks typically excludes angina or any other type of heart disease.

Stroke

A stroke can cause long-lasting disability with physical restrictions, cognitive impairment and a need for ongoing care and support. To qualify for a critical illness payout, a stroke must cause permanent symptoms resulting from the death of brain tissue following a haemorrhage or inadequate blood supply to the brain. The policy definition doesn't include transient ischaemic attack, which has similar symptoms to a stroke but doesn't cause long-lasting damage. It also excludes other types of brain injury or damage to the optic nerve, although some policies cover these issues separately.

Cancer

Critical illness cover for cancer is reserved for advanced cases, meaning coverage can often depend on the type of cancer your employee has and the stage it's reached on diagnosis and whether it's considered to be contained without risk of spreading or progressing further. For example, if your employee is diagnosed with skin cancer, they won’t be able to claim, as it's often confined to a single layer of skin. There are exceptions. Breast cancer can sometimes be confined to a single area of the body, but it's usually covered if the patient has surgery to remove it. Equally, pre-malignant tumours are excluded, meaning cover is only available for malignant tumours that have already spread or are likely to. A successful claim depends on the diagnosis and test results.

Multiple sclerosis

Multiple sclerosis (MS) can affect balance, memory and concentration and cause muscle cramps, numbness and spasms, visual impairments and fatigue. Symptoms typically worsen over a period of time, with many patients experiencing periods of remission and relapse initially.

Critical illness cover pays out when patients have been diagnosed with MS by a consultant neurologist and have experienced persistent symptoms for at least 6 months without remission. In practice, this means that an employee must have had a lengthy relapse or have entered the progressive phase of their illness.

Parkinson’s disease

Parkinson's disease is a progressive illness that typically affects physical movement, with symptoms including tremors, muscle stiffness and slower movement. It can have other, less common symptoms such as insomnia, dizziness and difficulty swallowing, along with mental health symptoms such as depression and anxiety.

Critical illness cover will typically pay a lump sum for Parkinson's disease following a diagnosis by a consultant neurologist or geriatrician. Critical illness insurance will typically specify an age limit for the claim and requires permanent physical symptoms, including tremor and muscle stiffness.

Alzheimer’s disease

Alzheimer's disease can be devastating to patients and their families, as it causes progressive memory loss, confusion and personality changes over time, with patients eventually being unable to care for themselves.

The person covered by critical illness cover must have a definite diagnosis from an appropriate consultant to claim. Age limits typically apply, and there must be evidence demonstrating permanent cognitive impairment across a range of functions. These usually include memory, reasoning and the ability to understand and express ideas.

Organ transplants

Critical illness cover will typically pay out for major organ transplants, which are often required as a result of other serious conditions. The guidelines define a major transplant as one received from another donor; therefore, transplants involving tissues or cells, such as stem cell transplants, aren't covered. They include complete organ donations and also bone marrow transplants. The policy definition includes patients who have had a transplant or are on an official waiting list for treatment.

Other permanent symptoms or disability

As we've mentioned, some illness insurance will provide a critical illness payout for conditions or injuries that may be excluded elsewhere. For example, the definition of a stroke excludes other traumatic brain injuries, but many policies protect these conditions under separate cover.

A critical illness policy will often cover a wide range of conditions if they cause permanent symptoms. These could include paralysis, extensive third-degree burns, speech loss, or loss of a limb. Many policies also include coverage if your employee is diagnosed with a terminal illness and expected to survive for less than 12 months. You'll often see coverage for employees who are diagnosed as being totally disabled. Policy documents define 'total and permanent disability' in different ways. Some define it as the inability to work in your usual trade, to continue in your current job or another suitable one, or to look after yourself. As you can see, the definition can make a significant difference in an employee's ability to claim, but the need for permanent symptoms underpins each definition.

As with most insurance policies, critical illness cover has exclusions. For example, any condition that falls below the policy's required severity level is excluded. This includes cancer that isn't considered life-threatening or hasn't spread. Chronic but manageable conditions, such as high blood pressure, are also excluded, along with injuries that will heal, as they don't meet the criteria for ongoing permanent symptoms.

Critical illness insurance also excludes any pre-existing medical condition for which an employee sought advice or treatment before joining the policy. Some insurers also exclude hereditary conditions passed down through the family. Most insurers will ask for details of pre-existing conditions when new employees join the policy. These exclusions can be permanent, so it's important to read the policy documents carefully to understand how exclusions work and the potential impact on your staff.

Most insurers cover the conditions we've discussed on every critical illness policy, but there are differences between providers and the cover they offer. Most insurers cover at least 30 conditions, with many offering enhanced cover for a wider range. Here are some of the main providers that we work with and the protection they offer.

AIG's critical illness insurance for businesses provides cover within three groups. Group 1 conditions, such as cancer, heart attacks, and permanent and irreversible blindness or deafness, receive the full lump sum, and coverage then ends. They also cover syndromes related to Parkinson's disease, which many policies don't. Group 2 conditions provide an employee with up to 50% of their payout or £35,000, whichever is lower. Their coverage will continue, so they can claim again if they're diagnosed with a different illness. Group 2 conditions include hospital treatment after an accident, severe sepsis and various surgeries, including a brain or spinal aneurysm, breast cancer surgery and angioplasty for heart disease. The same conditions apply to group 3, which covers only children.

You can also opt for additional cover for employees who become totally disabled.

If you decide to extend coverage to employees' children, they'll be covered for terminal illness, and everything included in groups 1 and 2, except loss of independence. The additional cover for total permanent disability is also not available for children. It also covers child-specific conditions such as cystic fibrosis, Down's syndrome and muscular dystrophy.

Aviva provides two levels of coverage. Standard cover includes 15 conditions, which is lower than some other insurers. However, it covers all the essentials, including cancer, heart attacks, strokes and major organ transplants. Extended cover provides extra protection and includes 28 additional conditions, such as heart surgery, blindness, and liver failure, as well as terminal illness insurance. You can also add cover for cancer drugs not available on the NHS, permanent disability, and extend coverage to employees' partners.

Aviva's critical illness cover also includes coverage for children as standard, which could be a real plus if you have working parents on your team. Children's coverage pays 25% of the benefit, up to a maximum of £25,000, and covers child-specific conditions, including loss of independence, which could provide a vital financial safety net if an employee needs to take time off work to care for them or pay for support. It includes biological, adopted, and step-children up to their 18th birthday, extending to their 23rd birthday if they're in full-time education.

Finally, your employees can access well-being services, including mental health support, which could supplement your private medical insurance.

Legal & General only offers critical illness insurance as an added extra when you buy their life insurance policy. They cover 36 conditions as standard, including all of the core conditions we've already mentioned, plus traumatic brain injuries, lupus and loss of an eye due to disease or injury. Coverage for children is also included as standard, covering up to 2 children up to 18 (or 21 in full-time education) and paying up to 50% of the lump sum or £25,000, whichever is lower.

You can also pay a higher premium to add coverage for low-grade prostate cancer needing treatment, and breast tumours requiring surgery.

Royal London's core coverage includes all the conditions you'd expect, plus cardiomyopathy, chronic lung disease, type 1 diabetes and severe mental illness, which could prove useful if you work in a high-stress industry. You can also invest in additional coverage to provide payouts for hospitalisation after an accident, and various low-grade cancers that don't reach the required severity for payment under their core coverage. Royal London also offers enhanced children's cover that includes hydrocephalus, spina bifida, Edwards syndrome and provides a child intensive care benefit.

Vitality's business serious illness insurance covers up to 174 conditions, depending on the options you choose. It's only available as an add-on with their relevant life insurance policy.

Coverage includes all the key conditions, plus several treatments and surgeries not typically covered elsewhere. These include rheumatoid arthritis, blindness in one eye and surgery for a detached retina, which leads to a full recovery in many cases. You can also add children's coverage if needed, with up to £100,000 of cover, which is more than most providers. What's more, when policy coverage ends, employees can convert up to £100,000 into dementia or elderly care coverage.

Zurich's group policy offers up to £500,000 in coverage, with the option to add full coverage for an employee's partner. Children's coverage is automatically included and pays up 25% of the total benefit. You can add employees as young as 16 or as old as 70, which is great for staff planning to work beyond the standard retirement age.

Standard coverage includes 15 conditions, including heart surgery, cardiac arrest, stroke and dementia. Their cancer coverage differs from other providers in that they allow more than one claim for cancer, providing it's in a different area of the body, and the employee has been symptom-free for at least five years.

There's also the option to extend coverage to include an additional 27 conditions, such as benign brain tumours, bacterial meningitis, loss of speech, and permanent blindness or deafness. Finally, you can add a cancer drug fund to pay for NHS-approved drugs where treatment has been declined on financial grounds. You can also add coverage for ongoing disability and choose which definition applies.

Providing your team with critical illness insurance gives them financial protection at a stressful time and can benefit your business by boosting employee morale, engagement and productivity. Choosing the best coverage for your needs requires careful assessment of your budget and staff needs, and comparing policy terms and conditions. At Globacare, we provide independent advice to help you make an informed choice. Contact us today for a comparison quote.