Jargon Buster - Definition of Life and Critical Illness Insurance

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Life and Critical Illness Insurance

is an insurance policy that combines life insurance and critical illness insurance. Usually this policy offers a combined benefit, this means that the policy can only be claimed on once, i.e. if the policy pays out for a critical illness then the life cover will cease. There are some advantages to having a combined life and critical illness policy: Firstly the critical illness survival period becomes inapplicable (as a death within this period will pay out on the life cover) and secondly premiums are very competitive and can often be cheaper than for standalone critical illness polices (whilst including free life cover).

The alternative to a combined policy is to take out an independent life and critical illness policy. This means that the policy will pay out once for death and once upon diagnosis of a critical illness. It is a slightly more expensive option than the combined cover as there is the potential for two claims.

Please note that all definitions are intended for general guidance only. For official and current definitions you should always double check your policy wording.

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