Critical illness cover

I would be really grateful for some guidance please.....

we currently have critical illness and life insurance cover on our mortgage costing £38 per month on a joint policy (on a decreasing term basis).
Is it worth continuing to pay this or would we be better with a straight level term assurance policy instead?

I have a pension plan with the NHS, and my hubby has a stakeholder pension plan.

Many thanks for any help,

Jo x

Comments

  • dunstonh
    dunstonh Posts: 116,040
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    Is it worth continuing to pay this or would we be better with a straight level term assurance policy instead?

    Older CI policies usually offer better cover than modern ones. If you have one of the older ones, it could be worth keeping.
    I have a pension plan with the NHS, and my hubby has a stakeholder pension plan.

    NHS pension good. Stakeholders good for those already retired or very close to retirement or with a low risk fund selection. Otherwise, usually poor.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • josephine36
    josephine36 Posts: 20 Forumite
    Many thanks for the reply.

    the decreasing CI policy (combined with the life insurance) was taken out 3 years ago . I am concerned because I have heard how companies use clauses and loopholes and the like to avoid paying. (ours is with Legal and General)

    My hubbys SH pension is new (he has another 32years to retirement age - I have 30 - assuming retirement age of 68).

    Jo x
  • dunstonh
    dunstonh Posts: 116,040
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    the decreasing CI policy (combined with the life insurance) was taken out 3 years ago . I am concerned because I have heard how companies use clauses and loopholes and the like to avoid paying. (ours is with Legal and General)

    3 years ago is after the change in critical illness cover so that shouldnt be a difference. Do not read too much into the coverage that some have done on CI payouts. The vast majority payout and those that dont usually do so for non-disclosure of medical conditions (i.e. not declaring a heart attack - yes that happens!) or not being a claimable event.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • josephine36
    josephine36 Posts: 20 Forumite
    Thanks for that.
    Will leave the policy in place then.

    Jo x
  • AndrewSmith
    AndrewSmith Posts: 2,871 Forumite
    I agree with DunstonH,

    I have been writing Critical Illness policies for 12 years and have only ever known one claim be refused. That was on on the grounds of non-disclosure of a prior medical condition.

    As long as you are fully aware of the extent of the cover provided and, as I have no doubts you did, gave accurate and correct information at the time of application then you should be covered in the event of a claim. The key is to make sure that you fully understand the terms and conditions of the policy, along with exactly what is and is not covered, and on what terms.

    Critical Illness policies are something that I whole heartedly beleive in. My father was diagnosed with terminal cancer nearly 2 years ago now after leading a fit and healthy life.

    The policy he had paid off his mortgage and gave him a sum to invest, the proceeds of which he now uses for his holidays which he seems to be constantly taking. In short it has provided him with an excellent quality of life that, without the policy, he would never have dreamed of being able to have.

    Advised correctly and taken for the right reasons it is something that I think everyone should at least seriously consider.

    I find it astounding that in this country people are prepared to pay £100 per month+ to insure a car for example with a value of £20,000, and they do so without batting an eyelid.

    When they are asked to protect themselves and their family's future financial stability for a cost of say £50 per month they seem to see this as extortionate. My question is which can be easily replaced?


    Andy
  • dunstonh
    dunstonh Posts: 116,040
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    I could also add that I am personally finding more claims being made on CI cover than life cover in recent years. I have yet to have one fail to pay out.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • AndrewSmith
    AndrewSmith Posts: 2,871 Forumite
    dunstonh wrote:
    I could also add that I am personally finding more claims being made on CI cover than life cover in recent years.

    Like-wise.
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