The TV presenter's husband Dan Baldwin is actor Outhwaite's cousin and Willoughby finds it hard to disguise her concern when the former EastEnders star hits her head on a thick sheet of ice, leaving her with a nasty bump.
In the final episode of the BBC One series, the celebrity contestants complete a challenge from last week where they are asked to swim a number of metres under water in a freezing pool beneath a layer of ice.
They are supposed to feel their way along a guide rope, but when it's Outhwaite's turn, she misjudges her position and hits her head against the ice above her, having to be taken away by medics.
Watch: Holly Willoughby reveals she was in tears as she took part in Freeze the Fear
Clearly distressed, after Outhwaite leaves the set Willoughby bursts into tears and has to turn away from the cameras.
She is comforted by co-host Lee Mack and Iceman Hof as she says: "I feel bad because they've (Chelcee Grimes and Professor Green) got to still do it."
Willoughby adds: "They've just got to be so careful. Guys, just be really careful because you saw what happened there, don't overshoot it, ok?"
The pair have worked together before - in last year's Masked Dancer, Willoughby was a guest judge in the episode that Outhwaite was unmasked as Scarecrow but failed to spot her relative, and she has also interviewed Outhwaite on This Morning where they spoke about being related.
Freeze the Fear will air its final episode of the series on Tuesday, where the celebrities are asked to take on the task they have been working towards - a jump and rope swing from a terrifyingly high bridge.
Viewers will be able to see which of the group decide to jump from the bridge as the series reaches its conclusion.
Freeze the Fear with Wim Hof airs on Tuesday at 9pm on BBC One.