Critical illness and accident cover

What critical illness and accident insurance pays for

Personal accident insurance commonly pays a fixed cash benefit for an injury caused by an accident that meets its terms. The benefit is the money payable, and a table of benefits lists the amounts for different injuries. Some policies also include accidental death or disability benefits.

Critical illness cover pays for a listed condition or procedure meeting a definition, meaning the contract's written medical test. Its list can include injuries as well as illnesses. A qualifying claim does not necessarily require time away from work.

The Financial Ombudsman Service's personal accident guidance distinguishes these products and explains that the accident policy fixes payments for specified injuries. Its headline cover amount is therefore not necessarily the amount for every claim.

Neither label alone establishes cover for any accident that stops you working. The full terms, your policy schedule and the benefit table need to be read together. The schedule is the document recording the individual cover selected for you.

Serious injuries may already be on the illness list

The Association of British Insurers, known as the ABI, sets minimum critical illness definitions. Its currently published guide was issued in September 2022 and updated in April 2023. Cancer, heart attack and stroke are the core conditions, while other listed conditions are optional for insurers to include.

The ABI minimum standards also contain model definitions for loss of a hand or foot, paralysis of a limb and traumatic brain injury. Those headings demonstrate the potential overlap with accident insurance. They do not mean every policy includes them.

The detail can be demanding. For example, the model hand or foot definition requires permanent physical severance at or above the wrist or ankle. The paralysis definition requires total and irreversible loss of muscle function in the whole limb.

An injury that affects someone's work can fall short of such a test. Our guide to what critical illness cover pays for explains the broader condition list. The comparison here is between the actual injury definitions in two contracts.

One cycling accident, three different outcomes

Consider three possible outcomes for Beth, a self-employed florist in Bristol, in these made-up examples. She cycles between home and her shop and has both critical illness cover and personal accident insurance. The fact that a collision happened is only the start of either assessment.

In the first version, she breaks her wrist and cannot make bouquets for eight weeks. Her critical illness policy has no fracture benefit, and her accident policy covers specified permanent injuries only. Those facts give her no payment under either contract, despite the disruption to her work.

In the second version, the accident policy includes a benefit for that particular fracture. If the circumstances meet its terms, that benefit may pay. It would be the listed fracture amount, rather than automatic reimbursement of eight weeks of lost earnings.

In the third version, the collision causes permanent physical severance of a hand at the wrist. Her critical illness policy includes the corresponding definition, while her accident policy also lists the injury. Both contracts need assessment, including any exclusions and restrictions on overlapping payments.

These are different versions of an example, rather than predictions about a real claim. The useful exercise is to write down the injury, identify the relevant benefit and follow its requirements. It shows what the extra accident policy adds much more clearly than counting policy names.

The cause of the injury can decide an accident claim

An accident policy may require the injury to result directly from an unexpected external event. Some wording requires the accident to be the sole and direct cause. An exclusion is a circumstance or cause the contract leaves out.

The Ombudsman's guidance for insurers discusses cases where other causes contributed to an injury. The accident's contribution and the severity of the resulting injury are separate questions. Both can matter to the same claim.

Imagine Imran, a warehouse administrator in Leicester, looking through papers after a fall. The accident report records where he fell, while the medical evidence addresses what caused his lasting impairment. A report proving that he fell cannot, by itself, establish every requirement for an accident benefit.

A listed critical illness has its own definition to satisfy. It is therefore possible for one contract to respond while another does not. There is no single assessment that automatically settles both claims.

Broken bones, hospital stays and time away from work

Some accident products include fracture benefits or hospital payments, while others concentrate on permanent injury. A hospital payment may require a specified length of admission. A visit to an emergency department does not necessarily meet that requirement.

Critical illness policies can also have smaller extra benefits, including accident hospitalisation benefits in some contracts. These have their own conditions and limits. An added accident benefit is not the same as a full critical illness payment.

For Beth, the relevant question is what happens during the weeks when she cannot use her wrist for work. A benefit for permanent loss of a limb does not answer that question. Nor does a hospital benefit if her injury does not require the specified admission.

Income protection pays regular amounts when illness or injury prevents work under its terms, often after an agreed waiting period. Our guide to critical illness cover and income protection explains that separate approach to lost earnings.

Check the activity as well as the injury

Accident wording can restrict particular sports, occupations or circumstances. Cover described as personal accident insurance might also be attached to a car or travel policy, with a narrower scope than a separate policy. Its name cannot tell you when and where it applies.

For a concrete check, suppose Beth also sees personal accident cover in her motor insurance documents. She would need to establish whose injuries it covers and which incidents qualify. The presence of that wording would not establish protection for her cycle trips.

The same reading exercise applies to work and leisure. The useful description is the activity actually taking place, rather than a broad label such as office worker or cyclist. Any exclusion then needs to be read against that activity.

Some application processes involve health questions, while accident products can use different eligibility conditions. Fewer questions do not establish wider claim cover. A protection specialist can check how the published terms apply to your situation without assuming an outcome from your job or medical history.

Can the same event lead to two payments?

It can be possible for separate contracts to pay for the same event if each claim meets its terms. Fixed benefits are different from repayment of a particular expense. However, the contracts still need checking for payment limits and any rules about other cover.

There is another distinction when accident benefits sit inside a critical illness policy. An extra hospital benefit may be unavailable if the same incident leads to a full critical illness payment. Two benefit headings inside one contract do not necessarily promise two payments.

Suppose Imran's documents contain both a serious injury definition and an accident hospital benefit. He needs to read the clause explaining how those benefits interact. The main cover amount and the hospital admission requirement cannot answer that interaction question on their own.

Our guide to having more than one critical illness policy covers multiple illness contracts. For this comparison, record separately what each policy could pay and what another payment would do to it.

A practical way to read the two policies

The comparison becomes useful when it names the event that matters to you. A temporary fracture, a permanent injury and a listed illness are three different tests. Each needs an answer from the relevant contract.

For each event, a written record can capture the following points.

• The named benefit and the amount listed for that event.
• The required cause and any severity or permanence test.
• Any required admission, evidence or survival period.
• Restrictions on work, activities, location or age.
• The effect of payment on the remaining cover and other benefits.

A survival period means living for a stated time after the relevant diagnosis or procedure. It is separate from the time taken to assess evidence. Our guide to when critical illness cover pays out covers that process.

For Beth, the completed record would show if the accident policy adds a fracture payment or repeats protection for permanent injury. For Imran, it would identify which reports and interaction clauses need checking. A protection specialist can explain unresolved wording using those specific questions.

If a claim decision appears inconsistent with the terms, the insurer can explain its reasons and consider a complaint. The Ombudsman's critical illness guidance describes how it examines the policy and evidence in disputes. Our claim guide covers the practical steps.

Questions people ask

Sources

We checked this guide against these sources. It is general information, not advice.

• Guide to minimum standards for critical illness cover, ABISeptember 2022 guide updated April 2023, supporting the optional injury definitions and their severity tests.
• Critical illness cover, ABICurrent publication page identifying the minimum standards guide and explaining variation in cover.
• Personal accident insurance, Financial Ombudsman ServiceExplains fixed injury benefits, accident definitions and disputes about cause and severity.
• Personal accident insurance complaint guidance, Financial Ombudsman ServiceExamines injury causation, policy exclusions and the evidence needed to establish a claim.
• What is critical illness cover?, MoneyHelperSupports the distinction between listed conditions, smaller benefits and injuries outside the main cover.
• What is income protection insurance?, MoneyHelperExplains regular payments for qualifying inability to work and the waiting period.
• Critical illness cover, Financial Ombudsman ServiceExplains how policy terms and medical evidence are examined in claim disputes.