Critical illness insurance does not usually have a beneficiary in the life insurance sense, because the payout goes to the policyholder, who is normally the person who is ill. Legal & General's terms pay "you", defined as whoever is legally entitled to the money when a valid claim is made. Who that is depends on how the policy is owned.

An FCA-authorised broker will review who would get the money under your own set-up, at no charge, if you hand your name and number to the form on this page.

Who is paid when the person with the policy makes a claim?

In the regulator's own market study, a stand-alone critical illness policy is one that "pays a lump sum to the policyholder" if they are diagnosed with a prescribed, non-fatal serious illness. Insurers' own wording points the same way. Aviva's Life Insurance+ policy summary (AL50001) says that once it accepts a claim it pays you, in the way you have chosen, and the policy ends, apart from an exception for its extra care cover option.

Legal & General's critical illness terms (QGI14872 - 2026/10) are the most precise. They define the life insured as the person covered by the policy, and "you" as "anyone who's legally entitled to receive the amount of cover when a valid claim is made", adding that this "could be a trustee, assignee, personal representative of the life insured". The claim is then paid as a single lump sum to that person.

So the usual case is simple: you own the policy, you are the person covered, and you receive the money. The cases below are where the owner and the person covered differ, or someone steps into the owner's place.

When does someone other than the person covered receive the payout?

Four situations change who is paid.

  • A trust. Legal & General's terms say that "if the policy has been placed in trust, we'll pay the trustees". Not every policy can go in one: its summary says critical illness cover taken as a separate policy alongside life insurance "cannot be issued or assigned into a trust", and Aviva's trust page excludes its Critical Illness Plan. Where critical illness cover is part of a life policy in trust, critical illness policies in trust explains who the trustees hold that payout for.
  • An assignment. The same terms say that "if the policy has been assigned, we'll pay the assignees", meaning the person to whom legal ownership has been transferred.
  • A business owner. Legal & General's key person page says that a key person policy, with critical illness cover if selected, "is owned and paid for by the employer, so any pay-out is payable to the employer" rather than to the employee who is ill. Who owns such a policy is explained in who owns key person insurance, and the wider picture in critical illness cover for business.
  • A policy owned by someone else. Aviva's table of who it pays on a death claim lists "a policy held by you and covering someone else" as paid to the holder, not to the person covered. That table concerns death claims, so whether a critical illness claim follows the same pattern is a point to check against the wording of your own policy.

Who should own a policy covering somebody else is worth deciding with help; a broker can unpick that ownership question with you at no cost through the form on this page.

How is a joint critical illness claim paid?

Legal & General's and Aviva's joint policies cover two people but pay once. Legal & General's policy summary (QGI14786 - 2026/10) says that "for a joint policy, we'll only pay the amount of cover once. This may be when the first person dies or has a valid claim." Aviva's summary says a joint "first event" policy "will pay out when the first person either dies, suffers from a critical illness or meets our definition of terminal illness", depending on the cover chosen.

Which of the two receives a joint critical illness payout under a given insurer's terms is a question your call-back broker can clear up, and asking costs nothing. For what happens to the second person's cover, see joint life insurance with critical illness cover.

On a death claim, Aviva's chart of who it pays sends a joint first-event payout to the surviving policyholder, or to the estate of the youngest policyholder if both die at the same time.

What if the person covered dies before the claim is paid?

The answer turns on the survival period: Legal & General sets 14 days from diagnosis and Aviva 10 days, and whether critical illness cover pays out if you die covers a death inside that window.

Surviving the period can still matter after a death. Legal & General's summary says that where critical illness cover is added alongside life insurance as a separate policy and you survive 14 days from diagnosis, "the policy may pay out after you die in which case the amount of cover will be payable to your estate and may be subject to Inheritance Tax". Its terms add that "if the owner of the policy is dead, the payment will go to their personal representative (usually the executor named in their will)". How tax applies to a living claimant is a separate question, answered in whether critical illness payouts are taxable.

Another insurer may handle a death between diagnosis and payment differently, and a broker can ask on your behalf how Aviva treats a claim that is still unpaid when the person dies. If this is your situation now, there is no rush to use the form on this page; the free call-back is available whenever you want it.

Frequently asked questions

What is a critical illness beneficiary?

Legal & General's critical illness terms pay "you", meaning the person legally entitled to the money, rather than a beneficiary the policyholder has named. The word beneficiary belongs to life cover and to trusts, and whether you must name a life insurance beneficiary covers that side.

Can I choose someone else to receive my critical illness payout?

The routes set out above are a trust, an assignment or a policy owned by the other person. Some trust deeds also let you give the critical illness benefit to the beneficiaries rather than keep it, which the page on critical illness policies in trust walks through. Whether your own policy allows any of these is worth checking with the insurer or a broker before you rely on it.

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