What Is Critical Illness Mortgage Insurance?

Critical illness mortgage insurance pays a tax-free lump sum if you're diagnosed with a serious condition like cancer, heart attack, or stroke. It's designed to clear your mortgage, ensuring you keep your home during treatment and recovery. Unlike life insurance which only pays on death, critical illness pays while you're alive when you need the money most.

What is critical illness mortgage insurance?

Critical illness mortgage insurance pays a lump sum if you're diagnosed with a serious condition. It's designed to clear your mortgage so you don't face repossession while dealing with illness.

Is it the same as mortgage protection?

Mortgage protection typically refers to life insurance that pays on death. Critical illness mortgage insurance pays if you're diagnosed with a covered condition while alive.

Do I need it if I have life insurance?

Life insurance only pays on death. If you become seriously ill but survive, life insurance won't help. Critical illness provides funds when you need them during your lifetime.

How much does it cost?

Costs depend on age, health, mortgage size, and term. A 35-year-old might pay £30-50/month for £200,000 of decreasing cover over 25 years.

Quick Answer

How Does Critical Illness Mortgage Insurance Work?

Last reviewed: December 2025

Reviewed by Jay Sabine – CeMAP Qualified – 29 years experience

Pays lump sum to clear mortgage if diagnosed with serious illness. Different from life insurance (pays on death). Protects your home during treatment.

Critical illness mortgage insurance provides financial security for your biggest asset - your home. If you're diagnosed with a covered condition, the payout can clear your entire mortgage, removing monthly payment stress during recovery.

Key Points

1Pays off mortgage if seriously ill
2Different from life insurance
3Tax-free lump sum payment
4Covers cancer, heart attack, stroke
5Choose decreasing or level cover
6Protects your home during illness

Eligibility Criteria

Diagnosis of covered condition
Meets policy definition
Policy active at diagnosis
Survival period applies

Typical Timeframe

Claims typically paid within 4-8 weeks of diagnosis confirmation.

Next Steps

1Calculate mortgage balance
2Decide cover amount needed
3Choose decreasing or level
4Get quotes from providers
5Speak to mortgage adviser

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How Does Critical Illness Mortgage Insurance Work?

Key Points

Eligibility Criteria

Typical Timeframe

Next Steps

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