Being diagnosed with a serious illness is one of the most stressful events that could happen to you. As well as dealing with the illness you will need to consider how you will cope financially if you become too ill to work.

Critical illness insurance pays out a tax-free lump sum should you contract a serious illness such as cancer or have a stroke.

However, while this cover is a must have for many, no one wants to pay more for it than they have to.

If you’re looking to take out critical illness insurance for the first time make sure you check the market and scrutinise any small print.

Opting for the cheapest premium could prove a false economy, as it may fail to pay out when you need it to.

If you’ve already got cover you should review it to make sure it’s still sufficient, and that you’re not paying for something you no longer need.

For example, if you’ve stopped smoking since taking out the policy you could be entitled to a cheaper premium.

It’s also worth shopping around for a cheaper policy. Just be aware that definitions in new policies have become stricter than those in older policies.

If you have a policy that’s more than six years old you may well be better off keeping that policy even if a cheaper one is available. Insurers will charge more if you’re deemed unhealthy and more likely to make a claim.

Keeping in shape and reducing your alcohol consumption can radically reduce your premium.

By Johanna Gornitzki, MoneyWise.co.uk

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