Generally, run alongside a life assurance policy, critical illness policies cover an individual for a set period against a number of serious illnesses, diseases and medical conditions. It pays out a single tax-free lump sum on the diagnosis of one of the illnesses specified in the policy details. Diagnosis alone of one of the specified illnesses is sufficient to trigger payment. There is no requirement for loss of earnings or even for special medical treatment. Each critical insurance provider has their own definitions of illness. Pre-existing conditions may be excluded.
