How much critical illness cover do I need?

Start with the bills that would be left unpaid during a period of illness. The gap can grow as sick pay falls, while help at home adds new costs. A month by month budget makes those changes visible before you discuss an amount with a protection specialist.

Updated 11 November 20267 min read

At a glance

  • Household spending gives a more useful starting point than a salary multiple.
  • Sick pay can change during the period you are budgeting for.
  • Count savings once and keep recurring costs separate from one-off costs.
  • A budget estimate does not decide which illnesses a policy covers.

Start with the gap in your household budget

There is no single amount of critical illness cover that suits every household. A useful starting calculation adds up the spending you want to fund during illness, then subtracts the income and savings available for that purpose. The result is a funding gap to discuss with a protection specialist.

A multiple of annual salary can hide that gap. Two people earning the same salary might have different rent, dependants, sick pay and savings. Gross salary also includes money taken off before it reaches your bank account.

Critical illness cover pays a lump sum when an illness meets the policy's definition, meaning its written medical requirements, and the other claim conditions are met. It does not pay simply because you cannot work, or provide a fresh payment for each month off. Your budget is a way to estimate a use for the money, rather than a test for claiming it.

Build a monthly spending figure you can explain

Bank statements, bills and payslips give you a firmer starting point than a national spending average. MoneyHelper's budget planner uses income and spending categories and can turn annual expenses into monthly amounts. That helps capture bills that arrive outside your usual monthly routine.

The spending side might include the following items.

  • Rent or mortgage payments and council tax.
  • Food, energy, water and essential transport.
  • Loan repayments and other continuing commitments.
  • Childcare and help for people who depend on you.
  • Annual household bills divided across the year.

Some spending might fall during time away from work, such as commuting. Other spending could rise, including travel to appointments or paid help at home. An entry for each change shows what your estimate assumes, instead of hiding everything in one allowance.

Include unpaid work too. If you normally collect children from school or care for a relative, losing that help can create a household cost even if your earnings stay the same. Count only the extra help being assumed, so ordinary childcare already in the budget is not added again.

Put sick pay on a calendar

Employer sick pay is often the biggest moving part in this calculation. Your contract or staff handbook should explain what is payable and for how long. Payroll can clarify the take-home amounts and how any Statutory Sick Pay fits into them.

Statutory Sick Pay is the legal sick pay entitlement for eligible employees. In November 2026 it is payable from the first full day of sickness absence and can run for up to 28 weeks. The old three waiting days and lower earnings limit were removed from April 2026.

That does not mean full wages continue for 28 weeks. Entitlement and the amount depend on the current rules and your circumstances. A budget needs the expected money reaching your account, rather than an assumption that your usual pay continues.

If contractual sick pay includes the statutory amount, adding both would count the same money twice. Likewise, statutory entitlement does not automatically start afresh when a period of employer sick pay ends. Record the dates and amounts together before subtracting them from spending.

A critical illness cover calculator worked through

Ruth is an employed teaching assistant in Derby, living with her partner and their child. She sketches a year away from work to understand the household gap. Ruth and all the figures in this example are fictional, and the year is a budgeting assumption rather than a recovery forecast.

Their regular household spending is 2,400 pounds a month. Ruth adds an assumed 200 pounds a month for extra transport and help, bringing spending to 2,600 pounds. Their income figures below already include her partner's earnings and the expected take-home sick pay for each stage.

  • Months one to three have income of 2,100 pounds a month, leaving a gap of 500 pounds a month, or 1,500 pounds.
  • Months four to six have income of 1,400 pounds a month, leaving a gap of 1,200 pounds a month, or 3,600 pounds.
  • Months seven to twelve have income of 1,000 pounds a month, leaving a gap of 1,600 pounds a month, or 9,600 pounds.

The three gaps total 14,700 pounds. Adding a separate, assumed one-off household allowance of 1,800 pounds brings the total to 16,500 pounds. Ruth has earmarked 2,500 pounds of accessible savings for this purpose, leaving a funding gap of 14,000 pounds.

This is household arithmetic, not a suggested insurance amount or a claim prediction. It assumes the stated income continues, the savings are available and the costs do not change. Changing one of those entries changes the result, which is why the working matters as much as the final number.

Test more than one period of recovery

A six, twelve or twenty-four month budget answers different questions about how long a lump sum might last. None is a medical estimate. The NHS explains that stroke recovery varies, with some people recovering over days or weeks and others needing months or years or longer changes to working life.

For Ruth, extending the same assumptions through a second year adds twelve monthly gaps of 1,600 pounds. That adds 19,200 pounds to the earlier result, bringing the gap to 33,200 pounds. She does not subtract the same 2,500 pounds of savings again, because it was already used in the first calculation.

A return to work could also be gradual in a hypothetical budget. A second version might show earnings returning part way through the year while extra childcare or transport continues. This makes the assumptions visible without pretending to predict a particular illness.

The number of months funded by a lump sum is different from the policy term, which means how many years the insurance runs. A twelve month spending plan could sit within cover lasting many years. The separate guide to how long critical illness cover lasts explains that choice.

Keep mortgage repayment separate from living costs

Paying off a mortgage and funding its monthly payments are two different uses of a lump sum. A calculation that includes both the full balance and every future repayment can count the same commitment twice. Renters still have a housing cost even though there is no mortgage balance to clear.

Ruth's monthly spending includes her housing payment. If she instead models clearing a mortgage, that version needs the outstanding debt as a separate entry and a revised monthly spending figure afterwards. Food, energy, council tax and other household costs would still remain.

There is no need to assume that one use suits everyone. The guide to critical illness cover for a mortgage looks at the housing question in more detail. Keeping the two calculations separate makes their different purposes easier to discuss.

Subtract only support available for this situation

Savings reduce a gap only to the extent that they are accessible and allocated to it. Ruth might keep some savings for an unrelated repair or another emergency. Money tied up in a home is different from cash available to pay next month's bills.

Life insurance generally pays following death, so an ordinary death benefit is not money available during recovery. Existing critical illness cover has its own conditions and payment amount to check. A smaller payment for a less severe condition cannot be treated as the full lump sum.

Income protection can provide regular payments when illness or injury prevents work under its terms. Its starting date and payment conditions affect which months it could help fund. The distinction is covered in critical illness cover and income protection.

Benefits also need a separate check before being treated as continuing income. Means tested benefits assess financial resources, and money held after a lump sum payment can affect entitlement. The guide to critical illness payouts and tax explains why the payment and benefits questions need to be considered together.

Take the working to a protection specialist

An estimate is more useful when another person can see what it includes. A protection specialist can assess how the amount fits your circumstances and the cover being considered. A large number on a policy does not widen the list of illnesses or remove its medical requirements.

Useful documents for that discussion include the following.

  • Your household budget and the recovery periods used.
  • Employer sick pay details with the dates when payments change.
  • Existing insurance documents and workplace benefit details.
  • The savings allocated to this purpose and those kept for other needs.
  • Notes on uncertain income, care costs or benefits.

Changes such as moving home, a different job or new caring responsibilities can alter the gap. Keeping the calculation makes it easier to see which assumption needs updating. The guide to getting critical illness cover advice explains what a specialist can help you check.

How much cover might you need?

Add up what a lump sum would need to cover while you recover.

12 months

You might want cover of roughly

 

    A rough guide, not advice.

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    Questions people ask

    How much critical illness cover should I get?

    There is no universal figure. A budget can show the gap between spending during an assumed period of illness and the income and savings available, which a protection specialist can assess alongside your circumstances.

    How much critical illness insurance do I need compared with my salary?

    A salary multiple does not show your actual household gap. Take-home income, bills, sick pay, savings and extra help at home can give two people on the same salary very different results.

    Is there a critical illness cover calculator?

    A calculator can total your assumptions, but it cannot predict recovery or decide a suitable policy. The worked example here splits the calculation into stages so changes in income are counted.

    Should critical illness cover pay off my whole mortgage?

    Clearing a mortgage is one possible use of a lump sum. A budget that assumes repayment also needs to remove the mortgage payments it has already allowed for, while keeping other household bills.

    How many months should my critical illness cover last?

    The months you want a lump sum to fund are a budgeting assumption, separate from the years the policy runs. Testing several periods shows how the gap changes without treating any period as a medical forecast.

    Sources

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

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