In ‘an increasing trend towards severity-based critical illness cover' nearly 60% of critical illness policies now offer severity-based cover.
According to the independent financial research company, data shows that the number of policies offering severity-based cover has increased significantly in the last few years - from 14% at the end of 2009 to 59% currently.
In addition, the range of conditions covered by severity-based clauses has also increased - from just 10 in May 2012 to 30 in May this year.
The most common severity-based cover is for breast cancer, with prostate cancer also typically covered. Other conditions covered include Crohn's Disease, ulcerative colitis and conditions relating to the cardio vascular system.
Ben Heffer, Insight Analyst for Life and Protection at Defaqto, said: "Severity-based cover is a welcome addition to critical illness policies. First, they cater for situations where, while the illness is not critical, it nevertheless gives rise to a financial need.
"Second, people with a critical illness policy might expect to be able to claim on their policy for some of these illnesses even though they are not really serious enough to generate a full payment."
He added a caveat that the severity-based cover and level of benefit offered by each provider varies significantly.
"Ultimately, however, it is crucial for people to read the documentation carefully to understand what a policy covers and, if required, seek advice before taking out a policy," he said.
