Serious illness cover pays a tax-free lump sum, once, if you are diagnosed with an illness listed in your policy, the CCPC says. The CCPC says it is sometimes called critical illness cover, and describes it as paying out on a specified illness. It does not replace your income, and only the illnesses named in the policy, as the policy defines them, are covered.
What it pays and how it is sold
You choose a sum. If a listed illness is diagnosed and your case meets the policy's definition, the insurer pays that sum in one go. It is a once-off payment, not an ongoing income.
You can buy it on its own, from an insurer or a broker. It is also often sold as an extra benefit on a term life, whole of life or mortgage protection policy, the CCPC says.
Illnesses the CCPC lists as typical:
- stroke and heart attack;
- some types of cancer;
- coronary artery disease;
- multiple sclerosis and motor neurone disease;
- kidney failure;
- blindness;
- major organ transplant, including being on a waiting list;
- benign brain tumour;
- severe burns.
Policies differ. The CCPC says not all of them cover common conditions such as angina, back injury or treatable cancers.
How it differs from income protection and life cover
| Serious illness cover | Income protection | Term life cover | |
|---|---|---|---|
| Pays when | A listed illness is diagnosed and you survive the set period | Illness, injury or disability stops you working | You die during the term |
| How it pays | One lump sum | A regular income after a deferred period | One lump sum |
| Tax | Tax-free lump sum (CCPC) | Benefit taxed under PAYE and USC (Revenue) | Tax-free lump sum, though inheritance tax may apply (CCPC) |
The CCPC says income protection costs more but covers a wider range of illnesses, and pays until you return to work or retire. Serious illness cover pays only for what is on the list. Our guide to income protection has the detail.
Definitions matter more than the list
The CCPC's advice is to look at how each illness is defined, not how many are listed. Some policies need your condition to be extremely serious before you can claim. Some illnesses carry extra conditions, such as permanent damage or a set level of severity.
You can claim only if all three of these are true:
- the illness is covered by your policy when you claim;
- a medical diagnosis matches the definition in the policy terms;
- you survive for a set time after diagnosis, usually 7 or 14 days.
Permanent total disability (PTD) cover comes in two forms. Any-occupation PTD pays only if you cannot do any job and cannot do normal daily tasks such as walking, lifting or writing. Own-occupation PTD pays if you cannot do your current job, but people in higher-risk jobs, such as sports professionals, may not be able to get it.
Exclusions to check
The CCPC says you are usually not covered if:
- the illness is caused by drug or alcohol abuse, a self-inflicted injury or not following medical advice;
- the illness existed before you applied and you did not disclose it;
- it resulted from dangerous or criminal activities;
- you live outside the policy's territorial limits for a certain time.
There may also be exclusions based on your own medical history, job or lifestyle. If you already have a condition, cover for that illness may be hard to get.
The Central Bank's Consumer Protection Code sets two rules here. Before you fill in a proposal form, the insurer or broker must explain any restriction, condition or exclusion in a serious or critical illness policy (Regulation 334). It must also tell you, on paper or another durable medium, what can happen if you do not disclose something: the policy may be cancelled, claims may not be paid, and you may find it hard to buy insurance elsewhere (Regulation 332).
Accelerated or additional cover
As an add-on to life cover, serious illness benefit comes in two forms:
- Accelerated. The policy pays on diagnosis or on death, and not twice unless only part of the sum was paid for a diagnosis. On a joint accelerated policy, a claim for one person's illness ends the cover for both.
- Additional. Life cover and serious illness cover are separate, so both can pay. It costs more than accelerated cover.
The CCPC's example: Agatha has €150,000 of life cover and additional serious illness cover of €100,000. A covered diagnosis pays her €100,000. If she dies within the term, her estate receives €150,000.
Check whether the premium can rise. Stand-alone cover for a fixed term, or cover on a fixed-term life or mortgage policy, has a fixed premium. Index-linked policies rise each year, and cover on a whole of life policy may cost more over time. If the premium is reviewable, the Code says the application form must carry a warning that it may or will increase, and when (Regulation 337).
Other benefits and the price
Children may be covered for most listed illnesses. The CCPC says a child's claim is usually up to 50% of your cover, to a maximum of about €15,000. Some policies release part of the lump sum early if you are on a waiting list for certain major surgery in Ireland, or need major surgery abroad.
Extras such as hospital cash, personal accident benefit, a conversion option and inflation protection usually cost more. The price itself depends on:
- the amount of cover;
- single or joint cover;
- the term, which usually ends at 60 or 65;
- your age, health and family medical history;
- smoking and drinking.
Answer every question on the proposal form fully and honestly, or your policy may not be valid. You can cancel within 30 days for a full refund, the CCPC says.
Who may not need it
The CCPC says this cover is most relevant if you:
- have no other cover for ill health;
- are not in paid work and cannot buy income protection;
- have a mortgage or other debts you would still have to pay;
- have dependants who rely on your income or your unpaid work at home or in a family business.
Read the list the other way round: if you already have cover for ill health, and no debts or dependants, you may need less cover or none. Do not overlook a partner who is not earning, though. The CCPC says a diagnosis for them may mean the working partner needs time off work.
Citizens Information says adding it to mortgage protection costs more than other types of cover. For that option, see mortgage protection insurance. For the choice of life policy, see term or whole of life cover, and our life insurance guide for an overview.
Sources
- CCPC: Serious illness insurance (accessed 9 November 2026)
- CCPC: Income protection insurance (accessed 9 November 2026)
- CCPC: Life insurance (accessed 9 November 2026)
- Central Bank of Ireland: Consumer Protection Code, Part 4 Insurance (Regulations 332, 334 and 337) (accessed 9 November 2026)
- Revenue: Permanent Health Benefit contributions (accessed 9 November 2026)
- Citizens Information: Insurance protection on mortgages (accessed 9 November 2026)
General information, not financial advice. Prices and rules change: check the details with the insurer before you buy.