Product Specification#
Status: Draft, 2026-08-03 (all cited sources accessed 2026-08-03).
Scope note. This is a standardized composite specification assembled for reference
liability cash-flow modeling. It does not describe any single insurer’s product. Facts
carrying a source tag — [S#] (primary product documents) and [R#] (regulatory/actuarial
references), both numbered per _research/critical-illness.md and resolved against
sources.md in this directory — were extracted from the cited document. [REG-R#] tags
resolve against the cross-product reference library
references/regulatory-and-actuarial-references.md (its own R-numbering, distinct
from the product research file’s R#; research provenance in
_research/regulatory-actuarial.md). Values marked std are standardizations
introduced for the reference implementation; each std table row carries a footnote
giving the rationale and the observed range across insurers. Facts the research file
could not verify are flagged unverified.
Base-chassis rule. The representative product is an accelerated critical illness
benefit built on the level, guaranteed-premium term assurance chassis specified in
products/term_assurance/ (companion product folder). Term-chassis provisions —
premium guarantee mechanics, terminal illness benefit, the first-year suicide clause on
the life element, grace and lapse, indexation (increasing cover) mechanics, and the
guaranteed insurability / life-change options — are cross-referenced there and only the
CI-specific deltas are restated here.
Product overview and market role#
UK Critical Illness Cover (CIC) pays a lump sum (“sum assured”) on the diagnosis of a defined critical illness. It is sold in two structures: (a) accelerated — combined with life cover so the sum assured pays on the earlier of death, terminal illness, or critical illness (offered as a combined life-and-critical-illness benefit [S11], and as a single life-or-critical-illness menu benefit [S8]; joint-life cover on a first-event basis [S11]); and (b) standalone — CI only, with no death benefit (the carrier that supplies the combined benefit also sells a standalone CIC paying only on a defined critical illness [S11]; another carrier’s CI product is a standalone contract [S4]). A further carrier sells CIC as a policy contractually separate from its life cover but distributed with it [S1]. The policy ends when the full (main) CI benefit is paid [S1] [S4] [S11]; lower-severity “additional payment” conditions and children’s claims pay capped partial amounts without reducing the sum assured or ending the policy [S1] [S3] [S4] [S8] [S11].
The right to call a product “Critical Illness Cover” is governed by the ABI’s Guide to Minimum Standards for Critical Illness Cover, which “sets out the minimum standards that insurers must meet to call their product Critical Illness Cover” R2; the 2021/22 review (guide dated 16 September 2022 [unverified — R1 not fetched], with April 2023 clarifications) changed the Alzheimer’s, cancer and heart-attack model definitions, with insurer compliance required for new policies by 31 January 2024 R2 R3. Insurer wordings visibly implement these model definitions [S1] [S11]. Market context: “On average, critical illness insurance policies only cover 75 conditions (Defaqto, 2026)” [S9]; most insurers now sell a core product plus an enhanced tier (a two-tier menu [S3]; standard vs upgraded [S4] [S5]; a 1X/2X/3X ladder [S9]).
The structural outlier is one carrier’s severity-graded design: instead of a full-payment conditions list, each condition is severity-graded and pays a percentage of the cover amount — historically 5% (Severity G) to 100% (Severity A) [S10], and 25%–100% per claim on the current standard plan (114 conditions; upgradable to 174 conditions with total claims up to 3x the cover amount) [S9] — with payments reducing a depletable “plan account” unless a protected-cover option reinstates cover [S10]. This design is documented under Variations across insurers and excluded from the baseline.
These are pure protection contracts: the fetched policy documents describe cancellation with no payment other than the cooling-off refund [S1] [S4] [S5]; no surrender value or paid-up value exists [unverified as an explicit statement; consistent with all fetched terms]. There is no asset share, bonus, or MVR mechanics anywhere in this product.
Representative specification#
Product identity and issue rules#
Parameter |
Representative value |
Basis |
|---|---|---|
Design type |
Accelerated CI: level term assurance + CI, sum assured paid on first event (death / terminal illness / critical illness), policy then ends |
[S1] [S8] [S11]; composite std (1) |
Standalone variant |
Same chassis minus the death benefit (see Contractual mechanics) |
[S4] [S11] |
Benefit shape |
Level lump sum (decreasing and family-income shapes out of scope) |
[S4] [S7]; scope std (2) |
Life basis |
Single life (joint life first event as a variant) |
[S11]; scope std (3) |
Premium type |
Guaranteed, level |
[S1]; choice std (4) |
Entry ages |
18–64 |
18 [S2] [S5] [S11]; 64 [S5]; composite std (5) |
Maximum age at policy end |
75th birthday |
[S2] [S5]; composite std (6) |
Policy term |
5–50 years |
[S2] [S5]; composite std (7) |
Sum assured |
No contractual minimum (minimum-premium driven); anchor cell £100,000 |
no-minimum [S2]; anchor std (8) |
Residency at application |
UK resident, ≥183 days in the last tax year |
[S1] |
Anchor model cell |
Male 40, non-smoker, £100,000 sum assured, 25-year term, accelerated, level guaranteed premium |
std (8) |
Footnotes to std rows:
The dominant market design (four of the five carriers surveyed): one full payment on a defined-conditions list which ends the policy, plus non-depleting additional payments [S1] [S4] [S11] [S6]. Chosen over the severity-graded account design [S9] [S10], which is the documented alternative.
One carrier also offers “family income cover” paying equal monthly instalments to the end of term [S4]; another offers lump sum or regular payments (decreasing cover lump-sum only) [S7]. Level lump sum is the simplest common denominator.
Joint-life policies pay on a first-event basis [S11] and carry separation options ([S1] [S4] [S11], see Riders). Single life keeps the reference decrement model one-life.
Retail CIC premiums are now typically guaranteed [S1]; reviewable variants persist (one carrier offers both, 5-yearly reviews with “no limits on how much your premium can change” [S4] [S5]; another offers both [S7] [S8]; a third’s intermediary-channel booklet is reviewable with 5-yearly reviews and ±5% tolerance [S3]). Guaranteed premiums are the modeling default; the reviewable variant is a module (see technical notes).
Observed minimum entry age 18 across three carriers [S2] [S5] [S11]. Observed maximum entry: 64 (one carrier [S5]; another’s non-level options [S2]), 67 (the same carrier’s life+CIC level option [S2]), 69 [S11]. 64 is the modal value.
Observed maximum age at policy end: 74 [S11], 75 (one carrier [S2]; another on guaranteed premiums [S5]), 90 (the same carrier’s reviewable premiums) [S5]. 75 matches the guaranteed-premium mainstream.
Observed terms: min 5 years (one carrier on guaranteed premiums [S5], and a second [S11]; 6 years on that first carrier’s reviewable variant [S5]; 2 years for life-level-with-CIC at a third and 5 otherwise [S2]); max 50 years (two carriers) [S2] [S5], 40 [S11].
No insurer publishes CI rate cards (research-file gap), and explicit sum assured caps appear only as adviser-page maxima (£2m–£3m depending on TPD basis [S2]). £100,000 / male 40 / 25 years is a pure modeling anchor; the level guaranteed premium attached to it in the technical notes (£55/month) is a std placeholder, not a quoted rate.
Benefits#
Parameter |
Representative value |
Basis |
|---|---|---|
Main benefit |
Sum assured, once, on the first of: death, terminal illness, or diagnosis of a listed critical illness (with survival period); policy ends on payment |
[S1] [S4] [S8] [S11] |
Survival period |
14 days from diagnosis; payable even if survival completes after the policy end date |
[S1]; pick std (9) |
Full-payment conditions |
~40 ABI-aligned definitions including TPD; concrete reference list = one carrier’s retail list (~37 definitions) |
list [S1]; count std (10) |
TPD definition |
Own occupation before 70th birthday, or Specified Work Tasks (unable ever again to do 3 of 6 tasks); TPD cover drops off at age 70 with a premium reduction |
[S1]; mirrored at a second carrier [S4] |
Additional-payment conditions |
2 conditions (carcinoma in situ of the breast treated by surgery; low-grade prostate cancer), each paying the lower of 25% of sum assured and £25,000; does not reduce the sum assured or end the policy; one claim per condition per life [S11] |
[S1] [S4] [S5] [S11]; calibration std (11) |
Children’s cover |
Automatic; lower of 50% of sum assured and £25,000 per child; max 2 children’s claims per policy; child aged 30 days to 18th birthday (21 if in full-time education) |
[S1]; calibration std (12) |
Child funeral benefit |
£4,000 (max 2 children) |
[S1]; range £4,000–£10,000 [S4] [S6] [S8] [S11] |
Diagnosis standard |
Diagnosis by a (UK) consultant of appropriate specialism |
[S1] [S4] |
Claim-validity residence |
Claims payable while the life insured resides in EU, Australia, Canada, Channel Islands, Isle of Man, New Zealand, UK, USA (insurer discretion elsewhere) |
[S1] [S3] |
Observed survival periods: 14 days (one retail wording, including children; and the severity-graded plan) [S1] [S10]; 10 days (main, additional and children’s benefits at another carrier [S4] [S5]; additional/children’s at a further carrier [S8]; and the same retail carrier’s intermediary children’s cover [S3]). The ABI-typical survival period is 14 days [unverified — R1 not fetched]. 14 days chosen as the value in [S1] [S10] and the unverified ABI-typical figure.
Observed full-payment counts: 33 (standard tier, incl. terminal illness) [S5], ~37 (a retail list, incl. TPD) [S1], 39 (incl. terminal illness) [S11], 46 [S6]; enhanced tiers add ~15–20 more [S3] [S4] [S5]. “~40 incl. TPD” is the composite; the model treats the list as a single aggregate incidence basis, so the count is documentation, not a parameter.
Observed additional-payment calibrations: 2 conditions at lower of 25%/£25,000 (three carriers: a retail wording [S1]; a standard tier [S4] [S5]; and a third allowing one claim per condition per life [S11]) → ~22 conditions at lower of 50%/£30,000 (an enhanced tier [S3]) → 32 conditions at 50% up to £35,000 ([S6] [S8]) → 26 conditions at lower of 100%/£30,000 (an upgraded tier [S4] [S5]). The core-tier calibration (2 conditions, 25%/£25,000) is adopted.
Observed children’s cover: lower of 50%/£25,000, max 2 children, ages 30 days–18 (21 FTE), £50,000 max per child across policies [S1]; lower of £25,000/50% standard or flat £25,000 upgraded, to 18 (21 FTE) or birth–22 upgraded [S4]; 50% capped £30,000–£50,000 to age 22/23 [S6] [S8]; optional, lower of £25,000/50% to 22nd birthday [S11]. Automatic inclusion is the pattern at three of the four carriers [S1] [S4] [S7]; the retail calibration in [S1] is adopted.
Contractual mechanics#
Notation: SA = sum assured; P = level guaranteed premium (per frequency);
subscripted benefit amounts as below. The same symbols and values are used in
technical-notes.md.
First-event main benefit (accelerated). The policy pays SA exactly once, on the
first of: (i) death of the life assured; (ii) terminal illness (per the term chassis);
(iii) diagnosis of a listed critical illness or undergoing a listed medical procedure,
provided the life assured survives 14 days from diagnosis [S1]. The 14-day survival
condition is satisfied even if the 14th day falls after the policy end date, so long as
diagnosis occurred in-term [S1]. Payment of the main benefit terminates the policy
[S1] [S4] [S11]. Because death within the survival period itself triggers the death
benefit for the same SA, the survival period is cash-flow-neutral in the accelerated
design (it only reclassifies the claim); it is economically binding only in the
standalone variant.
Additional-payment benefit (non-depleting). For each of the 2 listed lower-severity conditions, one claim per condition per life:
B_AP = min(0.25 x SA, GBP 25,000) [S1][S4][S11]
Payment of B_AP does not reduce SA, does not end the policy, and does not change
the premium [S1] [S3] [S4] [S8] [S11].
Children’s cover (non-depleting). Each eligible child (30 days to 18th birthday, 21 if in full-time education) is covered for the listed full-payment conditions on the same definitions, with a 14-day child survival period [S1]:
B_child = min(0.50 x SA, GBP 25,000) (max 2 children's claims per policy) [S1]
plus a child funeral benefit of £4,000 on death of a child (max 2 children) [S1].
Children’s claims do not reduce SA or end the policy [S1] [S4] [S8] [S11]. Exclusions:
conditions present at birth; symptoms before cover start; death within the survival
period; TPD [S1].
Standalone variant. Identical chassis minus the death and terminal-illness benefits: the sum assured pays only on a defined critical illness (plus survival period) [S11] [S4]. Death of the life assured within the survival period, or death without a prior CI diagnosis, ends the policy with no payment [S4] [S11] (a premium-refund-on-death feature exists in some designs [S4] [S11 — recorded jointly in the research file] and is excluded from the composite std); the survival period is therefore a real benefit-reducing decrement in this variant (see technical notes). All other provisions (additional payments, children’s cover, premiums, options) are unchanged [S4] [S11].
Premiums, grace and lapse. Premiums are level and guaranteed for the term [S1]. If a premium is unpaid, cover continues for a 60-day grace period; if still unpaid the policy is cancelled without refund and without value [S1] [S4]. There is no surrender value at any time [S1] [S4] [S5] [unverified as explicit statement]; cancellation inside the 30-day cooling-off period refunds premiums in full [S1] [S4] [S5].
Exclusions. CI policies carry few blanket exclusions; exclusions are embedded per definition (e.g., cancers below staging thresholds; myocardial injury without infarction; TIA) [S1] [S3]. Case-specific exclusions appear in the policy schedule [S1]. The first-year suicide/self-inflicted-death clause applies to the life insurance element (term chassis) [S1] [S3].
Misrepresentation. Claims can be declined for misrepresentation; the proportionate remedy reduces cover to
SA' = SA x (premium charged / premium that should have been charged) [S1]
consistent with the CIDRA 2012 graduated-remedy regime for careless consumer misrepresentation REG-R20.
Headline definitions (ABI-aligned). The composite adopts the 2022/23 ABI minimum-standard parameters as implemented in the reference retail wording [S1] R2 R3: cancer requires positive histological diagnosis of a malignant tumour with invasion, with staging floors (prostate Gleason ≥7 or ≥ cT2bN0M0; urothelial ≥ T1N0M0; thyroid ≥ T2N0M0; NETs WHO Grade ≥2; GIST AFIP/Miettinen-Lasota moderate/high risk or UICC/TNM8 stage ≥II) [S1] R3; heart attack requires new ECG/imaging changes plus characteristic troponin rise, excluding myocardial injury without infarction [S1] R2; stroke requires death of brain tissue with deficit lasting ≥24 hours, excluding TIA [S1]; dementia (including Alzheimer’s) of specified severity with MCI excluded [S1] R2.
Riders and options#
In scope (modeled or embedded in the base contract):
TPD — embedded as one of the full-payment conditions (own occupation before 70 / Specified Work Tasks 3-of-6); drops off at age 70 with a premium reduction [S1]. In the model it is part of the aggregate CI incidence basis, not a separate decrement.
Additional-payment conditions — modeled as a non-terminating frequency loading (see technical notes) [S1] [S4] [S11].
Children’s cover — automatic; modeled as a non-terminating frequency loading [S1] [S4].
Indexation (increasing cover) and guaranteed insurability option — contract features per the term chassis [S1] [S4] [S11]; described, but the base model point is level cover with no exercises std.
Out of scope (listed for completeness): waiver of premium [S1] [S4]; family income benefit shape [S4] [S7]; extra-care cover (cover amount + £50,000 on CI with severe permanent disability / ADL failure) [S4]; fracture cover (£2,000–£6,000 schedule) [S4] [S11]; global treatment (overseas treatment, 3-year renewals) [S4] [S5]; hospital benefit (£100/night from 8th night) [S4]; joint-life separation options and replacement cover after a joint-life claim [S1] [S4] [S11]; enhanced condition tiers at two carriers [S3] [S4] [S5]; an advanced-surgery benefit (payment on joining an NHS waiting list) [S6]; and the severity-graded plan’s severity mechanics, its claim-uplift, cancer-relapse, dementia and frailty add-ons, and its children’s severity cover [S9] [S10].
Variations across insurers#
Payment architecture. Dominant design (four of the five carriers surveyed): one full payment on a 33–46-condition list ending the policy, plus capped non-depleting additional payments [S1] [S4] [S11] [S6]. The fifth replaces this with a severity scale (historically A–G, 100% down to 5%; currently 25%–100% standard) and multiple claims against a depletable or protected plan account [S9] [S10]. Representative choice: the dominant design — it is what four of five fetched insurers sell, and it keeps the reference model single-decrement for the main benefit.
Additional-payment calibration. 25% capped £25,000 (three carriers’ core tiers) → 50% capped £30,000–£35,000 (an enhanced tier, and a fourth carrier) → 100% capped £30,000 (an upgraded tier) [S1] [S3] [S4] [S8] [S11]. Chosen: 25%/£25,000 — the core-tier calibration common to three insurers.
Two-tier menus. Core + enhanced tier is now standard (a two-tier menu [S3]; standard vs upgraded [S4] [S5]; “three levels” at a third carrier per its 2024 relaunch [unverified — media page not fetched]; a 1X/2X/3X ladder [S9]). Enhanced tiers add ~15–20 full-payment conditions and expand partial payments [S3] [S4] [S5]. Chosen: core tier only; enhanced tiers change the incidence basis, not the mechanics.
Survival period. 14 days (a retail wording and the severity-graded plan) vs 10 days (two other carriers, and the same retail carrier’s intermediary children’s cover) [S1] [S4] [S8] [S10] [S3]. Chosen: 14 days (footnote 9).
Children’s cover. Always a capped percentage (50%) with per-child and per-policy limits; caps £25,000–£50,000; enhanced tiers add congenital-onset conditions, pregnancy complications and conversion options [S1] [S3] [S4] [S6] [S8] [S11]. One carrier makes it optional; three others include it automatically [S11] [S1] [S4] [S7]. Chosen: automatic, 50%/£25,000, 2-claim limit (the retail calibration in [S1]).
Premium guarantee. Retail CIC premiums typically guaranteed; reviewable variants persist with 5-yearly reviews — unlimited changes at one carrier, ±5% tolerance in another’s intermediary variant [S1] [S3] [S4] [S5] [S7]. Chosen: guaranteed, with the reviewable design documented as a technical-notes module.
Accelerated vs standalone. Both are sold; the accelerated form is packaged with life cover as the mainstream retail proposition [S1] [S8] [S11], while another carrier’s CI product is a standalone contract [S4]. Chosen: accelerated as base (it exercises the combined decrement), standalone as the documented variant with a one-line model delta.
Regulatory context#
Prudential — PRA / Solvency UK. CI business is valued under the PRA Rulebook’s Technical Provisions Part: technical provisions = best estimate + risk margin (rule 2.4), where the best estimate is the probability-weighted average of future cash flows discounted on the relevant risk-free term structure, gross of reinsurance, including all cash in- and out-flows required to settle the obligations (rules 3.1–3.2) R7 REG-R1. The reformed risk margin (rules effective 31/12/2024) uses the cost-of-capital method with CoC = 4% and a risk-tapering factor λ = 0.9 (floor 0.25) for long-term business R7 REG-R4. Lapse/surrender assumptions must be realistic and reflect dependence on future conditions, and obligations are segmented into homogeneous risk groups (9.1–9.2, 10.1) R7. The matching adjustment now sits in its own Rulebook Part R7 and is in practice irrelevant to CI term business unverified.
Conduct — FCA. CIC is a non-investment insurance contract, so conduct rules sit in ICOBS, which applies to distribution and to effecting and carrying out such contracts (ICOBS 1.1.1R) R5 REG-R11; the “pure protection contract” glossary mapping is unverified. The Consumer Duty (PRIN 2A) requires firms to deliver good outcomes, including fair value, on retail protection business R6 REG-R12; in-force dates 31 July 2023 (open) / 31 July 2024 (closed) unverified. Consumer misrepresentation remedies follow CIDRA 2012’s graduated regime (deliberate/reckless vs careless) REG-R20, which the contractual proportionate-remedy formula implements [S1].
Industry self-regulation — ABI minimum standards. The ABI Guide (2022, with April 2023 clarifications) sets the minimum condition definitions required to use the CIC label; the 2021/22 review broadened Alzheimer’s to all dementia (with MCI exclusion), clarified cancer exclusions and excluded myocardial injury from heart attack, with compliance required for new policies by 31 January 2024 R2 R3. The Guide itself could not be fetched (Cloudflare challenge) R1; its content is triangulated from R2 R3 and implementing wordings [S1] [S11].
Authorisation classes. Accelerated CI written with life cover falls in long-term Class I (life and annuity); standalone CI is typically written as long-term Class IV (permanent health: defined benefits for incapacity from accident or sickness, of indefinite duration or running to retirement age, with restricted insurer cancellation rights) or general classes 1–2 for short-term forms R4 REG-R14 for the class definitions; the mapping of CI products to classes unverified.
Tax. Under FA 2012 Part 2, protection business written post-2012 is non-BLAGAB long-term business taxed on trade profits (BLAGAB I-E applies to investment life business, not these contracts) REG-R17. At the policyholder level the reference retail policy is written to remain a qualifying policy compatible with para 19(3) Schedule 15 ICTA 1988 and “cannot be issued or assigned into a trust” [S1]; other insurers’ plans are commonly placed in trust unverified. FSCS protects 100% of claim value, with continuity of cover preferred [S1].