Will a claim for critical illness affect any State Benefits?

No, it should not affect your claim for State Benefits.

STEP 1 of 2
Type of cover
Life Insurance       Mortgage Life Insurance
 
Cover Level (£)

Number of years
Do you want:  
Critical illness cover
Family income benefit
 

Hot Topics

What could Critical Illness cover be used for?
Anything you want. Medical expenses, repaying the mortgage, making your home easier to live in, school fees, general living expenses, but to name a few.
What conditions are considered critical?
Years ago Critical Illness policies only covered heart attacks, strokes and cancer but today the list of insured illnesses is truly extensive.
What level of critical illness cover could your children get?
Insurance companies normally impose a maximum limit on any claim under the policy’s provisions for children. Sometimes the limit will be lower of a percentage of your own sum assured (e.g. 25% or 50%) or a set amount (typically £15,000 or £20,000).
Will you need a medical if you apply for a critical illness policy?
In order to correctly assess the risk they are being asked to accept an insurance company may require further information from your GP or request that you undergo a medical. In most cases these medicals only take five or ten minutes.
Will a claim for critical illness affect any State Benefits?
No, it should not affect your claim for State Benefits.
There are a number of State Benefits obtainable if you are sick or disabled and some of these may apply if you are off work as a result of a critical illness.

The allowances concerned are Statutory Sick Pay, Incapacity Benefit, Disability Living Allowance or Severe Disablement Allowance. (From time to time the Government changes these benefits so please double check this information with your local Benefits Office.)

Currently, none of these benefits are means tested. Therefore, they will not be affected by your receipt of a lump sum from your insurer.

If you have a partner who is a carer (or may become a carer as a result of your illness) they may also be entitled to a Carers allowance. At the moment this allowance is only paid if their income is below £77 per week (2003/04)

Remember, all lump sum payouts from a critical Illness policy are tax-free.

Frequently Asked Questions related to the above topic.
Click below if you wish to read them: -