How CIC protects your mortgage
Critical illness cover pays a tax-free lump sum on diagnosis of a covered condition. If you use this money to pay off your mortgage, you eliminate one of your biggest monthly outgoings — giving you financial breathing room to focus on recovery without worrying about losing your home.
How much cover do I need for my mortgage?
A common approach is to match your CIC sum assured to your outstanding mortgage balance. However, many advisers recommend adding 20–30% to cover additional costs such as private treatment, home adaptations, or temporary income replacement while you recover.
Level vs decreasing CIC for mortgages
- Decreasing CIC — the sum assured reduces over time, mirroring a repayment mortgage. Cheaper premiums, but only covers the mortgage.
- Level CIC — the sum assured stays fixed. More expensive but provides the same cover throughout the term — useful if you want surplus funds beyond the mortgage.
Combined life and critical illness for mortgages
Most mortgage lenders don't require you to have CIC — but it's strongly recommended alongside life insurance. A combined policy that pays out on death or serious illness is the most comprehensive mortgage protection available.
Frequently Asked Questions
CIC pays a tax-free lump sum — you can choose to use it to pay off your mortgage, but you are not required to. The money is yours to use as you see fit.
No — CIC pays a lump sum on diagnosis, while mortgage payment protection (MPPI) covers monthly payments during unemployment or illness. They serve different purposes.