Critical illness cover or income protection?

Critical illness cover pays a lump-sum cash payment if you develop a critical illness like cancer, heart failure or stroke¹. Income protection protects your income if you fall ill and cannot work, paying a percentage of your income each month¹. One pays once, on diagnosis. The other pays a regular income while you are unable to work.

That difference decides most of the choice. Critical illness cover is built around a list of named conditions, often 100 or more, and pays whether or not the illness stops you working². Income protection is built around your ability to work, and covers any illness or disability that leaves you unable to work for a period of time, including mental health conditions such as stress⁴. Income protection typically pays around 50% to 70% of your salary⁴.

Neither is a substitute for the other, and they can be held together. The sections below set out what each covers, what it excludes, how much cover is available, and how the two fit with life insurance.

Critical illness cover pays a lump sum, income protection pays a monthly income

Critical illness cover pays a single lump sum if you are diagnosed with a serious illness listed in the policy details⁸. The medical conditions covered are named in the policy, and the payout does not depend on whether the illness stops you working². It is usually a one-off, lump sum payment on diagnosis of a serious illness such as cancer, a heart attack or stroke⁹. The money is yours to use as you choose: clearing a mortgage, paying for adaptations to a home, or replacing lost earnings while you recover¹⁰.

Income protection works on a different principle. It is a type of insurance that can pay you a proportion of your income if you are off work because of illness, injury or a terminal illness¹¹. It pays a regular income rather than a lump sum, usually covering around 50% to 70% of your salary⁴. One provider describes its income protection as a monthly premium that could replace your income if you fall ill or are injured and cannot work¹².

The two are counted among the key types of protection insurance, alongside life insurance¹³. Which one suits a person depends on what they need the money to do. A lump sum suits a one-off cost or a debt. A monthly income suits ongoing household bills during a long recovery.

Conditions critical illness cover does not include

Critical illness policies typically will not cover being diagnosed with an illness outside your policy term, death during the term, death within a certain number of days of receiving the diagnosis, or a diagnosis of an illness not explicitly covered by the insurer⁵. Not every type of illness is covered under critical illness cover¹⁴.

One provider lists the circumstances in which it will not pay a critical illness claim: not meeting the policy definition, dying within 14 days of diagnosis, giving false information during the application, and a policy lapsing because of missed payments¹⁵. Common exclusions across the market are linked to aviation, criminal acts, drug abuse, failure to follow medical advice, hazardous sports and pastimes, HIV/AIDS, living abroad, self-inflicted injury, war and civil commotion¹⁶.

Mental health conditions are the clearest gap. Critical illness cover pays out on a list of named conditions, and these are largely physical illnesses. Income protection covers a wide range of conditions, essentially any illness or disability that leaves you unable to work, including mental health conditions including stress⁴. Health insurance, a different product again, may only cover acute conditions rather than chronic conditions¹⁷.

How much critical illness cover you can buy: up to £500,000

Several providers cap critical illness cover at £500,000. One provider states a maximum amount of cover of a total of £500,000⁶, and a group critical illness scheme allows cover in fixed amounts or multiples of salary, up to £500,000⁷. A combined life and critical illness policy allows up to £1,000,000 for the life protection element and £500,000 for the critical illness protection element¹⁸.

Not every provider agrees. One provider states a maximum of £3 million, so the ceiling is not uniform across the market⁶. Post Office critical illness cover runs from £10,000 to £200,000, or no more than 100% of the life insurance policy cash sum¹⁹. Mortgage-related cover sold through an adviser appointment offers critical illness cover up to £500,000²⁰.

For most people the practical limit is set by underwriting and affordability rather than the headline cap.

Critical illness cover on its own or added to life insurance

Critical illness cover can be added to a life insurance policy or bought separately²¹. One provider lets you add critical illness cover, income protection or life or critical illness cover for an additional cost, at the outset or later²². Another allows critical illness cover as an add-on to life insurance or decreasing life insurance at extra cost²³.

The choice matters because of how a combined policy pays. One provider sets out the two structures: one cover for life or critical illness, which pays out for whichever event happens first, or two separate covers so a critical illness claim leaves the life cover unaffected²⁴. Critical illness cover can be added to a life insurance policy or bought separately, providing a lump sum on diagnosis of a specified serious illness¹⁸.

There is a middle route. When critical illness cover is taken out with life insurance or decreasing life insurance, some additional benefits come at no extra cost²⁵. All of these products are medically underwritten by the relevant insurer, so acceptance depends on an individual's circumstances²⁶.

Does critical illness cover pay out for mental health conditions?

Generally no. Critical illness cover pays out if you are diagnosed with one of a list of 100 or more diseases or conditions, subject to severity requirements²⁷. Those lists are dominated by physical conditions. One provider's critical illness protection covers 55 full payout conditions²⁸. Another describes cover for one of more than 100 illnesses that disable you or prevent you working at full capacity²⁹.

Cancer is the condition most people think of, and cover can include types of cancer, sometimes depending on the stage or grade of the cancer²⁹. Critical illness cover pays out for specific critical illnesses or injury which could be life changing, unlike life insurance which pays out on death³⁰.

Income protection is the product that responds to mental health conditions. It covers any illness or disability that leaves you unable to work for a period of time, including mental health conditions including stress⁴. For someone whose main concern is being signed off work with a mental health condition, income protection is the cover built for that event, while critical illness cover is not.

Does income protection cover back problems?

It can. Income protection replaces lost income if you are unable to work due to illness or injury², and its cover scope is any illness or disability that leaves you unable to work for a period of time, including physical conditions such as cancer or a heart attack⁴. Back problems fall within that description where they stop you working.

The limits are in the policy wording. Illness insurance policies do not always cover every type of illness and may exclude pre-existing medical conditions, and some policies say you cannot claim if you can do other kinds of work than your own³¹. That last point matters for back conditions, where a person may be unable to do their own job but able to do another. The definition the policy uses, whether own occupation or a broader one, decides the claim.

Income protection pays a proportion of your income if you are off work because of illness, injury or a terminal illness¹¹. It pays a regular income rather than a lump sum, usually covering around 50% to 70% of your salary⁴. If you receive sick pay or have access to group income protection through work, you may not need as much individual cover⁴.

What is Immediate Cover on a critical illness policy?

Immediate Cover is temporary protection that starts while a full application is assessed. It only pays out on injury, illness or conditions that are the result of an accident¹⁸. It is not cover for illness alone.

The terms apply to several policies, including Critical Illness Protection, Children's Critical Illness Protection and Critical Illness Essentials, and the same accident-only basis applies to each¹⁸. For Critical Illness Essentials, the information is valid for all applications made on or after 15 June 2026¹⁸. For a combined life and critical illness policy, Immediate Cover for the critical illness element will only pay out on injury, illness or conditions that are the result of an accident¹⁸.

Can critical illness cover pay a regular income instead of a lump sum?

Usually it pays a lump sum, but not always. One provider's critical illness cover pays out a lump sum or monthly income if you are diagnosed with a critical illness or total permanent disability³². That is the exception rather than the rule: most critical illness cover pays a single lump sum if you are diagnosed with a serious illness listed in the policy details⁸.

If a monthly income is what you need, income protection is the product designed around it. It pays a regular income rather than a lump sum, usually covering around 50% to 70% of your salary⁴. The two can be combined, and some providers let you add income protection alongside critical illness cover for an additional cost²².

Premiums: guaranteed or reviewable

Critical illness cover premiums come in two main forms. Guaranteed premiums mean you pay the same monthly payment for the life of the policy, and these usually cost more to start with. Reviewable premiums are reviewed, usually every five years, and are likely to go up over time⁸.

Cover can also be structured as level cover or decreasing cover⁵. Level cover keeps the payout the same, while decreasing cover reduces it over time, typically alongside a repayment mortgage. Some policies offer an indexation option that applies to benefits including life protection, critical illness protection, life with critical illness protection, family income benefit, critical illness family income benefit, life with critical illness family income benefit and income protection³³.

A history of medical issues affects the price. Any cover you find is likely to be more expensive, and it may also have more extensive exclusions than cover for people without a history of medical issues⁵.

Where to get help and how to complain

If a claim is turned down or a policy is not what you were led to believe, the Financial Ombudsman Service can look at complaints about critical illness cover¹⁰. It also handles complaints about medical insurance and personal accident insurance¹. Complaints about income protection and other protection products go through the same route.

Free, impartial help is available. Macmillan Cancer Support publishes guidance on protection insurance and cancer, including the types of insurance available²⁹. Mental Health and Money Advice covers what insurance someone with a mental health condition might need¹⁷. StepChange provides debt information for people affected by long-term sickness³⁴.

The wider picture is that most adults have no protection cover at all. The Financial Conduct Authority's final Pure Protection Market Study, published in September 2026, found around 58% of adults have no life insurance, critical illness cover or income protection, and the regulator stopped short of new rules³⁵. It concluded competition works well for those with cover, and announced partnerships and a TechSprint to expand coverage³⁶.