critical illness cover

moggitymog

Hi all,
Just wondering if you think critical illness cover is worth it?
Reason I ask is that we pay what seems a huge amount for life and critical illness cover, We have always paid this but are hearing stories about company's not paying out, would the money be better saved for something else?

lisyloo

Do you have permanent health insurance?
In my view it isn't worth paying for CI if you haven't go PHI.

PHI pays an income until retirement if you can't work.
CI pays out a lump sum if you get a specified illness.

The problems with this are
1) Your lump sum may well not last until retirement especially if you are young.
2) You might not get the "right" illness.

PHI covers your need for income if you are unable to work. They don't specify which illnesses only that you can't work.

CI is good for
1) altering your home if you had an accident
2) going on a round the world cruise if you are diagnosed with a terminal illness
but not necessarily good for replacing an income.

I think of CI as a luxury, but PHI seems more valuable to me.
I think critial illness is better for the sellers and not for consumers.

moggitymog

I am begining to think that way too, we have a large mortgage, which in turn makes the cover very expensive, i have never heard anything about PHI

dunstonh

but are hearing stories about company's not paying out

The media tend to focus on the 10% of claims that are not paid out. They dont focus on the 90% that are.

would the money be better saved for something else?

Like any insurance, it depends on whether you have a claim or not.

Just wondering if you think critical illness cover is worth it?

Statistically, 1 in 6 will suffer a claimable event before retirement. That compares to 1 in 5 for death. Statistically its far higher than PPI/MPPI although PHI is really the priority option over critical illness.

i have never heard anything about PHI

Its mostly a product sold by IFAs. Tied agents have increasingly moved towards PPI or budget versions of PHI (which look like PPI). Online sites focus on PPI as its more profitable for them and as there is virtually no underwriting at point of sale, its easier for them (PHI is fully underwritten at point of sale)

Admiral_Burrows

Hi Moggity,

You didn't take your Critical Illness Cover from your bank or estate agent by any chance did you?

Banks and estate agents selling this type of cover (or any insurance for that matter tend to be far far far overpriced!)

With regards to choosing between CIC and PHI I think i'd have to agree lisyloo. You are more likely to make a claim on a PHI (or Income Protection as its sometimes known) policy than a Critical Illness Cover.

Your best bet is to firstly check you are actually paying a decent price for your cover and then take some advice from a whole of market advisor (who doesn't charge a fee - I usually use top quote uk because its free and friendly).

Hope that helps!

Chris

dunstonh

Your best bet is to firstly check you are actually paying a decent price for your cover and then take some advice from a whole of market advisor (who doesn't charge a fee - I usually use top quote uk because its free and friendly).

Are you saying that topquote don't earn anything from the policies and yet still give advice?

stephenni1971

Your best bet is to firstly check you are actually paying a decent price for your cover and then take some advice from a whole of market advisor (who doesn't charge a fee - I usually use top quote uk because its free and friendly).

1. Topquote site allows users to ontain comparison quote and then apply immediatey.

2.Admiral,you state you usually use this site, is buying insurance a regular occurrence for you?

3. You say you should take advice froma whole of market adviser that doesn't charge fees - why? Many would argue the case that fee based advice removes any product/commission bias.

Moggitymog - it could be argued that noinsurance is worth it unless you need to make a claim- you have to insure your car and your home, what you do after that is up to you.

Whatever your circumstances,using an IFA may be a good route for you to review your situation as they will conduct a full fact find and give unbiased advice based on your personal situation.

moggitymog

Reason i ask is that our mortgage is£210000, life and critical illness on our joint policy is £170 per month, this just seems huge, we have shopped around but the quotes get higher

1ST4COVER

It only becomes value for money if you feel it offers security or you claim
I echo the other posts re phi although a cheaper alternative for critical illness cover is family income benefit scot eq offer this if you claim it pays an income for the remaining term eg 10k per year, however if you did claim it is possible they may commute this to a lump sum

stephenni1971

although a cheaper alternative for critical illness cover is family income benefit scot eq offer this if you claim it pays an income for the remaining term eg 10k per year

You are comparing two completely different products here without giving a proper explanation of the difference.

Critical Illness - usually pays a lump sum on diagnosis of a covered illness such as heart attack/stroke/most cancers

PHI ( permanent health insurance ) - will provide you with a replacement income if you are unable to work for health reasons - payments will continue for the remainder of the term

FIB ( Family Income Benefit ) - will provide a regular yearly income in the event of the death of the policyholder for the remainder of the policy term.

I personally dont see how you can suggest a product designed to pay out on DEATH, as a cheaper alternative to a product which is designed to be paid on on HEALTH grounds.

Also advertising your site on here is rather tacky... sorry I meant VERY tacky...

stephenni1971

moggitymog wrote: »

Reason i ask is that our mortgage is£210000, life and critical illness on our joint policy is £170 per month, this just seems huge, we have shopped around but the quotes get higher

On your existing ( joint ) policy, what are the sums assured for death and/or critical illness? Have you got a level term or decreasing policy? What age are you both and how much term do you require to take you to the end of your mortgage? Will you still have a need for cover after your mortgage is paid?