What is the difference between life insurance and critical illness cover?

LIFE INSURANCE | 21.04.2025

What’s the difference between the life insurance and critical illness cover, and do you really need them both? Let’s break it down…

When you take on a mortgage, you're making one of the biggest financial commitments of your life. So it makes sense to ensure that, should the worst happen, your loved ones aren’t left with the financial burden. That’s where life insurance and critical illness cover come in. But what’s the difference between the two, and do you really need them both? Let’s break it down…

Life insurance: peace of mind for your loved ones

Life insurance is designed to pay out a lump sum if you die during the term of the policy. This money can be used by your partner, children or dependents to pay off the mortgage, cover living expenses, or simply help them adjust financially after your passing. It’s especially important if you have a mortgage, because it ensures your loved ones won’t have to sell the family home or take on your debt. For many, life insurance is about leaving behind financial security and one less worry at a difficult time.

Critical illness cover: financial support when you need it most

Critical illness cover, on the other hand, pays out a tax-free lump sum if you’re diagnosed with a serious illness that’s listed in the policy, such as cancer, stroke, or heart attack. Unlike life insurance, this type of cover is designed to help you while you’re still alive. The money can be used to replace lost income, pay for treatment, adapt your home, or even take time out to recover without worrying about bills. When you have a mortgage to pay, a critical illness could make it hard to meet repayments. Critical illness cover acts as a safety net, giving you breathing room to focus on your health, not your finances.

Do you need both life insurance and critical illness cover?

Life insurance and critical illness cover are often taken out together as part of a comprehensive protection plan. They serve different purposes but work well alongside one another, especially when you have long-term financial responsibilities like a mortgage or dependents to support. Having both means you’re covered in a wider range of scenarios, giving you and your family valuable peace of mind.

How Taylor Made can help

At Taylor Made, we don’t just help with mortgages, we also help you protect what matters most. We can guide you through your options for life insurance and critical illness cover, tailoring policies to suit your budget, needs, and lifestyle. Whether you’re buying your first home or reviewing existing cover, we’ll help you put the right protection in place. Get in touch today to speak to one of our friendly advisors: our team is based in Manchester and operates throughout the UK.

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