Critical illness insurance may pay out when one of the specified critical illnesses is diagnosed and meets the policy's defined severity criteria. Not every diagnosis of cancer, heart attack or stroke will automatically qualify; the condition must meet the specific definitions in the policy document.
Cover is for a set term, which may be equal to a mortgage term, or for when children have grown up, until retirement, or until another life stage milestone is achieved. It may be worth considering having one policy for a set term to cover the mortgage and another that will provide money to help provide for your different lifestyle if a serious illness happens.
Most people choose a lump sum to be paid out. There is the option of receiving the payout as a set income over the term remaining, which is often a lower-cost option.
If the policy has no investment element then it will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse. The policy may not cover all the definitions of a critical illness. For definitions please refer to the key features and policy document.