Critical illness insurance pays out a lump sum if you are diagnosed with any of a range of serious conditions, which include cancer, heart disease, strokes and multiple sclerosis.

Advances in medicine mean that even when diagnosed with a very serious disease, you are likely to survive for some time. A cash lump sum helps ease financial worries while you are undergoing treatment and recuperation.

When buying critical illness insurance you must decide how many conditions you want covered, and how much cover you need. You must also decide how long you want the policy to last and whether you want to include it as part of your life assurance.

The cost of buying cover is likely to be a major consideration. It may appear expensive compared to life assurance but that is because you are two-and-a-half times as likely to suffer a critical illness than you are to die before the age of 65.

Most people opt to cover the cost of their outstanding mortgage loan, plus a bit more. Your policy should last at least as long as your mortgage.

The basic number of conditions covered is usually five or six. You can pay more in order to include a range of up to 30. Once diagnosed with a critical illness, you must contact your insurer, which will seek confirmation from your doctor.