Five common group critical illness cover myths

Research shows that 63% of SME bosses worry their staff may face a benefits protection gap in comparison with workers at larger firms. Yet only 18% of SMEs offer group critical illness cover – making it the least popular group protection cover.1 But why?

We debunk five of the top myths about this valuable, low cost benefit.2

Myth 1: Critical illness cover is the same as life insurance and income protection
Group critical illness cover is a type of employee protection benefit, so in this respect it is similar to life insurance and income protection. However, it has a different function, different risk and different benefit.

It pays a tax-free lump sum to an employee if they suffer a defined critical illness while in your employment (and satisfy any eligibility criteria at outset of cover). It is designed to ease the financial burden placed on your employee and their family should they suffer a critical illness – some policies also automatically include children’s cover as part of the policy. It can also help pay for private treatment and help get staff back to work quicker. This may help to reduce group income protection claims and premiums, because employees aren’t hitting the deferred periods.

Myth 2: You have to be terminally ill, or die, to claim the benefit
Not at all. Insurers will have certain eligibility criteria that your staff will need to meet at the outset of cover; and pre-existing conditions won’t be covered. There is usually a 14-day period at the start of your policy, during which you cannot claim for illnesses. But providing your employee has passed this and is suffering from a defined critical illness, they will be able to make a claim.

Myth 3: It’s expensive
This depends entirely on the cover that you put in place. For example, a company insuring only their Directors at 3 or 4 times salary may result in a more expensive policy. However, a policy offering a lower fixed benefit amount of £20,000 or £50,000 to everyone would be easier to budget for. Some insurers will also fix the premium rate for 3 years.

Myth 4: Your policy has to cover a wide range of illnesses
Not necessarily. Obviously in order to make a claim, your employee must be suffering from a defined critical illness by your policy. However, research from a leading insurer shows that 85% of all their group critical illness claims come from three core illnesses – cancer, heart disease and stroke.2

Most providers offer a choice of cover levels, meaning you only pay for what you need. So you could consider a policy that covers these illnesses in their core cover.

Myth 5: To get value for money, there needs to be a claim
Many critical illness policies also offer additional support as part of their cover. For example:

  • employee assistance programmes offering 24/7 helpline for advice on everyday issues like debt and childcare.
  • Cancer support services offering enhanced support for any employees diagnosed with cancer to help them understand their diagnosis and treatment options, as well as ongoing support and guidance for cancer recovery.
  • Some providers also offer the opportunity to get a second medical opinion for free.

It is worthwhile understanding the full benefits of having critical illness cover in place for both you and your employees.

This article first appeared on


1 Opinium and MetLife UK joint study March 2018

2 Unum, 2019

Marketing communication Jelf19.344