Can I reinstate life cover after a critical illness claim?

Critical illness cover pays out once, and the cover then ends¹. On a combined policy, where critical illness cover sits inside a life insurance policy, that claim usually ends the life insurance element too, so the death payout is reduced or gone². That is the problem the reinstatement option exists to solve.

Where a policy includes it, the option lets you take out new life cover on the life of the person who claimed, without giving further evidence of health, 12 months after the claim is paid³. You have to ask within 3 months of the first anniversary of the claim payment⁴. Miss that window and the right is gone, and any new cover means a fresh application with medical questions about the illness you claimed for.

Not every policy has the option, and it is not something you can normally bolt on later. It appears in the policy conditions of some older plans, so the first practical step is to find out whether yours has it.

Why life cover often ends after a critical illness claim

The reason is structural rather than a quirk of one insurer. Critical illness policies pay out once, and the cover then ends¹. Where critical illness cover is wrapped inside a life insurance policy, the payout for death is often reduced if the insurer has already paid out for critical illness². Most combined policies pay out once, so a critical illness claim usually ends the life insurance element⁸.

Some insurers run the two elements separately. Post Office says that once a critical illness claim has been paid, that element of cover ends, critical illness premiums stop, life insurance premiums continue at the same price, and the life cover level is unaffected⁹. Its support pages put it the same way: the critical illness cover ends and the monthly premium reduces, but the main life cover policy continues with no change to the life cover cash sum¹⁰. Legal & General describes the opposite outcome on its own critical illness cover: once the claim is paid, the policy ends and there is no critical illness cover in place¹¹.

The distinction matters to a reader because it decides whether there is anything left to reinstate. If the life cover survived the claim, there is nothing to rebuild. If the whole policy ended, the reinstatement option is the route back to life cover without underwriting.

The life cover reinstatement option: new cover without medical evidence

The option is a contractual right, not a favour. On the plan details that carry it, the wording is that 12 months after a claim is paid as a result of a critical illness or Total Permanent Disability, you may take out a new Life Cover only on the life of the person covered who the claim was made for³. The same conditions appear in earlier versions of the same document, from 2011 and 2009, in identical terms⁴.

The value is in what you avoid. After a serious illness, a fresh application means detailed medical information and possibly a medical examination, higher premiums and restrictions on the maximum sum insured⁷. People who have recovered from cancer may be asked for detailed medical information and to attend a medical examination before taking out a new policy¹². The same pattern applies to other conditions: insurers price the history, and the sum insured is often capped.

The reinstatement option sidesteps that by removing the health questions. It is the same principle as the increase options insurers offer on life events, which let you raise cover without further medical evidence¹³. Legal & General describes being able to increase cover on certain specified events without the need for further medical evidence¹³, and the same wording appears on its decreasing life insurance¹⁵ and whole of life plan¹⁶. Royal London's policy conditions describe a renewal option exercisable without giving any further evidence of health of the life assured¹⁷.

Timing: 12 months to wait, then a 3-month window to apply

The timetable is fixed and short. The option becomes available 12 months after a critical illness or Total Permanent Disability claim is paid, and must be requested within 3 months of the first anniversary of the claim payment⁴. The same 12 month and 3 month structure appears in the 2009 and 2015 versions of the plan details⁵.

In practice that means the clock starts on the date the claim is paid, not the date of diagnosis. Critical illness claims themselves take time to settle. Which? reported in November 2024 that term insurance claims took an average of 53 to 122 days to process¹⁸. A reader working out their own window should take the payment date from the settlement letter rather than estimate it.

The narrowness is the point to plan around. A 3 month window is easy to miss during a year of treatment, recovery and paperwork, and the insurer is not obliged to remind you. Diarising the first anniversary of the payment date, and contacting the insurer before it, is the practical step.

When the option is not available

Several things close the option off. It is not available after your 55th birthday, or if you have been diagnosed with or received treatment for the insurer's definition of a critical illness, or for carcinoma in situ of the breast treated by surgery, or low grade prostate cancer requiring treatment under additional cover¹⁹. On relevant life policies, guaranteed insurability options are not available if a higher premium applies because of medical history, if the insured person would be 55 or older on their next birthday at the start of the increase, if the benefit end date is less than one year after the increase starts, if the insured person has a terminal illness the insurer later pays a claim for, if you are making a claim, or if you are not resident in the UK²⁰.

The option is also once only. The plan details state plainly that you can only reinstate your cover once⁶. And it belongs to the person who was not the cause of the claim: the person covered who was not the cause of a paid claim on death, terminal illness, critical illness or total permanent disability may take out new life or critical illness cover, only once⁶.

Claims themselves can fail for reasons that would leave nothing to reinstate. Legal & General lists not meeting the policy definition, dying within 14 days of diagnosis, false information during the application, and a policy lapsing through missed payments¹¹. Post Office requires you to be covered when you claim, to be diagnosed with one of the four critical illnesses covered that meet the definitions, and to survive at least 30 days after diagnosis, with no claim during the first 3 months from the cover start date¹⁰. Halifax notes that an insurer will likely contact your GP for confirmation of diagnosis²¹, and Post Office requires a doctor's confirmation of the illness²².

Joint policies: reinstating cover for the other person

On a joint policy the outcome depends on how the cover is built. Legal & General says that on a single life policy cover ends on death, while on a joint policy the survivor may be able to continue the critical illness cover policy after the first valid claim¹³. Virgin Money takes the other approach: if a claim is paid for a critical illness, the cover ceases and no further critical illness claims will be paid²³. HSBC sets out the same rule for policies covering two people, where critical illness cover ends if either person makes a successful life or critical illness claim²⁴.

Some insurers sell a dual form of joint cover specifically to avoid that. Guardian describes dual life cover where, if one of you has to claim, the partner still has cover in place and does not have to try to replace it when they are older²⁵.

There is also a separation route. Legal & General allows a joint policy to be split into two single policies if a couple divorce, dissolve their registered civil partnership, if either takes over an existing mortgage in one name, or takes out a new mortgage in one name, with the change requested within six months of the event and not available if either life insured has had a valid claim¹⁹. Splitting can be requested unless a claim has been accepted¹⁴.

Reinstating after a Total Permanent Disability claim

The reinstatement wording covers Total Permanent Disability as well as critical illness: the option applies 12 months after a claim is paid as a result of a critical illness or Total Permanent Disability³. Total Permanent Disability cover is usually an optional benefit included as part of critical illness cover, or of combined life and critical illness cover²⁶. Legal & General offers it for an additional cost if critical illness cover or critical illness extra is chosen²⁷.

Definitions vary, which affects whether a claim is paid at all. Macmillan notes that some policies have a total and permanent disability clause which might pay out if you are unable to do the same or similar work as before, certain activities at work such as lifting, or any kind of work²⁸. Where a claim is paid under one of these conditions on LV='s critical illness cover, the policy continues for the full amount of cover²⁹.

If the option is not there, or you miss the window

Without the option, the position is the same as any new applicant with a medical history. Insurers may ask for detailed medical information and a medical examination, charge higher premiums and restrict the maximum sum insured⁷. That is the practical cost of missing the window, and it is why the option is worth checking for before a claim rather than after.

Two other routes exist on some policies. Critical illness cover can be added to a life insurance policy or bought separately, providing a lump sum on diagnosis of a specified serious illness³⁰. And combined cover can be arranged in two ways: one cover paying out for whichever event happens first, or two separate covers so that a critical illness claim leaves the life cover unaffected³¹. The second structure is the one that avoids the reinstatement problem altogether, because the life cover was never spent.

If you are unsure what your policy contains, the insurer that administers it can confirm. HSBC directs life cover and critical illness claims to Chesnara Life at www.chesnaralife.co.uk/bank-policy-holders-claims/²⁴. For free, impartial help understanding protection cover, MoneyHelper is the government-backed service.