What is severe illness cover?

Key takeaways

  • Cover for severe illness will pay you out a benefit on diagnosis of a serious illness such as cancer, a heart attack or even in some cases, a serious injury. 
  • It differs from lump sum disability cover in that your illness need not be permanent. 
  • It is aimed at helping you pay for additional expenses that can arise when you are ill. 

Severe illness cover
 can be a policy or benefit on a policy that pays you a lump sum on diagnosis of a serious illness, such as cancer or a heart attack. The benefit is designed to help you pay for the costs well beyond medical expenses that can arise when living with such an illness. 

Severe illness cover is also known as dread disease cover or critical illness cover. 

Increasingly, life insurers are also offering cover for serious injuries on these policies.

It differs from disability cover in that ipays out on diagnosis of a defined illness and in some cases injuries, rather than an assessment of your ability to work.

While lump sum and income disability benefits are aimed at providing for lump sum needs such as the additional costs of an impairment, paying off debt or replacing lost income when you are disabled either temporarily or permanently, a severe illness benefit is aimed at providing for additional costs that put pressure on you financially when you have a serious health event.  

Some policies offer additional benefits such as limited critical illness cover for family members, such as children or parents.  


Severe or critical illness cover is now sold in many countries, but had its origins in South Africa.  

Dr Marius Barnard, the brother of Dr Christiaan Barnard, who performed the first heart transplant at Groote Schuur in 1967, is regarded as the founder of critical or severe illness cover. 

Barnard was also a cardiac surgeon and part of the team with his brother who carried out the first heart transplant.  

Through his work, he realised that you are more likely to survive a major health crisis than you are to die from it, but, having survived, the cost of you living on after a health crisis is likely to be greater than the cost of providing for your family in the event of you dying. 

Barnard persuaded a small life insurance company, Crusader Life, to launch a severe illness policy in 1983.