Critical illness is changing. It is no longer associated with older people and the protection insurance industry is working to face evolving health challenges.
Cancer, for example, is on the rise among 24-to-49-year-olds. Incidence of the disease in this group jumped by a quarter (24%) between 1995 and 2019, Cancer Research UK says.
The stats for stroke are more severe. There was a 67% rise in the condition in those aged under 55 between 2002 and 2018, according to the Medical Research Foundation.
This comes at a time when the protection industry is selling half the number of critical illness policies than the one million it sold in 2003.
This is not due to the quality of today’s plans, but that they are more expensive with the chances of suffering from a critical illness are much higher.
“It used to be said that you had a 400% more chance of suffering from a critical illness before retiring than dying. Now it is 500%,” says Alan Lakey, director of Highclere Financial Services and CIExpert.
“As an industry we have reacted by improving plans, but less people are buying them,” he adds.
Indeed, only 11% of adults in the UK are covered against the risk of suffering from cancer, stroke or heart attack, research from Vitality has discovered.
This has coincided with the number of companies selling critical illness cover to consumers shrinking from 36 to nine in the past 30 years, which Lakey puts down to regulators stifling innovation.
Prudential, Swiss Life, Canada Life and Aegon no longer sell protection products to individuals in the UK, but they still do in other countries. “There are vibrant protection markets in Hong Kong and India, where they can make more profit as there is less intrusion from a regulatory perspective,” Lakey says.
Then there are price comparison websites. “The mindset of the people using them is to get the cheapest,” he adds.
“They think getting something for £300 rather than £500 is a good deal. It is only when they come to claim that they find out there is a reason why it is cheaper.”
Lakey believes that insurance should be a quality-based product rather than one focused on premium and set up CIExpert to help advisers offer that.
“My view is that clients want value for money, but if they are left to their own devices, they chase premium,” Lakey says.
Prices need to rise to match the risk, but providers fear they will lose business if they do.
“If companies make more money on protection, Aegon, Canada Life and AIG would not have left. We would have a more vibrant market,” Lakey says.
Your own mortality
While consumers are not buying as much critical illness cover as they did 20 years ago, they are receptive to discussing the topic, says Justin Harper, chief marketing officer at LifeSearch.
“We live in this post-Covid environment where people are uber conscience of their health,” he adds.
Projections by the World Cancer Research Fund that half of the UK’s population will be diagnosed with cancer could also be on the minds of consumers.
But no one wakes up and thinks about getting critical illness cover, says Adam Higgs, head of protection, employee benefits and GI at St James Place.
“If someone close to them suffers from cancer or a heart attack, it brings to light their own mortality. At that point people will search for insurance.
“And there are probably less things that will kill you than lead to a critical or severe injury or illness,” he adds.
Medical advancements
With competition forcing premium quotes lower and risks rising, the industry is close to a stage where the cost-to-cover ratio offered by some plans will peak, Higgs says.
“Medical advancements have a big impact on critical illness,” he adds. “If someone came out with a test that could detect any cancer, the critical illness market would fall apart.”
It appears that this could already be happening.
There was a time that cancer was only spotted when it was severe. “Now it is being caught in the early stages and policies have to payout a load of claims,” says Vince O’Connor, head of strategic partnerships at Guardian.
The personal touch
One area where plans have improved is that critical illness has become more personalised.
In the past 20 years, the product has gone from covering a set of conditions to consumers picking the cover they want.
Examples include selecting or omitting cover for pregnancy complications or children. “Why would you pay for children’s cover if you couldn’t claim on it,” Higgs says.
Much of this is about value for money. “Consumer duty has had a large role to play in this in ensuring that customers are getting value out of their products,” Higgs says.
All or nothing
Another innovation in the critical illness market is the introduction of partial payment claim triggers. This reflects the influence of medical advances, such as screenings, which have led to people being diagnosed with life-changing conditions earlier in their life.
“Policies have tried to keep pace with the medical advances we are seeing,” says Fi Wynn, head of protection proposition at Royal London.
It appears that this has created some fundamental changes to how these products work.
“Critical illness is an all-or-nothing product,” says Justin Taurog, chief executive of Vitality Life UK.
“If your cancer or heart attack is severe enough you get a 100% payout. If you don’t meet that definition, you get paid zero.”
Vitality does not offer critical illness cover. Instead, it provides serious illness insurance, where a member could receive a 15%, 25% or 50% payout following an early diagnosis.
If the condition deteriorates, or they are diagnosed with another illness, they could get a further payout. The point is they are still covered if they successfully make a claim.
Due to advances in medical technology, illnesses are now picked up earlier, are treated earlier and cancer survival rates, for example, are now higher.
“Once you are treated and survive, you need your cover to continue,” Taurog says.
“[This is] moving from a product that is all or nothing –which may have been right when critical illnesses were picked up late and were often terminal – to this new world where there are such advances in medicine that a product pays out earlier but is still there if people survive,” Taurog says.
“100% or nothing is not what the customer needs,” Taurog says.
And one in 10 serious illness claims Vitality Life pays are repeats. The company has even paid out four times to the same person. “You could call them lucky, or unlucky to get ill, but they are fortunate to have that cover,” Taurog says.
Harper says that due to medical advances and early diagnosis, severity-based payments have worked well.
“That feels like a positive step in the right direction. In the good old days when I started it was binary. They had broad definitions for fewer critical illnesses, whereas over time those definitions have become more detailed and there is almost a series of levels, too.”
Not just for homeowners
Back in 2024, new individual critical illness policy sales jumped 22% in 12 months to around 134,000, according to Swiss Re.
Momentum appears to have continued into 2025 with LifeSearch’s critical illness sales 10% higher than in the previous year, a “healthy improvement” given that the company is not a mortgaged-influenced distributor.
Wynn is also seeing rising critical illness sales, but “interestingly” more standalone critical illness policies are being sold.
“That means advisers are thinking about their customers’ needs holistically and not just linked to a life sale,” she says.
And their needs may not involve worrying about their mortgage.
Indeed, CIExpert’s Critical Thinking 2026 report discovered that consumers don’t want critical illness insurance to pay off their mortgage if they get sick. Only 8% were motivated for this reason, while 12% want the payout to fund private treatment.
“People are starting to see a link between critical illness and health outcomes and perhaps to take more control of their treatment pathway,” Wynn says.
“That is a positive story for critical illness. People are renting more, but they are still seeing the need for it. It has value for them.
“This is not just for homeowners. It is for anyone who takes their health seriously,” she adds.
Staying relevant
Looking to the future, further technological advances could lead to even faster and perhaps earlier diagnosis of critical illnesses. And plans need to reflect this.
“With medical advances continuing to evolve, critical illness has to stay relevant to consumer needs,” Wynn says. “Partial payments and retaining their cover are ways the industry has changed.”
And it will have to change further to ensure that “there is still a relevant critical illness market going forward,” Wynn says.