What is a combined life and CIC policy?
A combined (or "accelerated") life and critical illness policy provides a single sum assured that can be paid out on either death or a critical illness diagnosis — whichever happens first. Once a claim is paid, the policy ends.
How does it work?
Example: You take out a £200,000 combined policy. You're diagnosed with cancer and make a CIC claim — you receive £200,000 and the policy ends. Your life insurance is gone. If you had separate policies, the CIC would pay out but your life insurance would remain in place.
Combined policy — pros
- Cheaper than two separate policies
- Simpler to manage (one policy, one premium)
- Suitable if life insurance is purely for mortgage protection (after a CIC claim and recovery, the mortgage may be paid off anyway)
Combined policy — cons
- A CIC claim eliminates life insurance protection
- Less flexible — harder to adjust independently
- Not suitable if you want ongoing life cover after a serious illness diagnosis
Separate policies — when to choose them
Separate policies cost more but provide independent protection. If both are important to you — covering your family on death AND providing a lump sum if you're seriously ill — separate policies are the better structure. Many financial advisers recommend separate policies for this reason.
Frequently Asked Questions
Yes — a combined policy typically costs less than two separate policies for the same sum assured, because only one payout can occur.
With a combined policy, the policy ends after any payout — whether for CIC or death. With separate policies, a CIC claim doesn't affect your life insurance, which continues in force.