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PHI and MPPI and CI ???? order of importance,?
Comments
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Bear in mind that CI only covers you for certain illnesses, so it's possible you might get diagnosed with something not covered and be unable to work.
PHI gives you an income (until you draw your pension) if you cannot work.
Please be aware of the difference between getting an illness on a list and being unable to work.
For example an accident would not qualify for CI.
The insurances have different roles, so I am not saying that one is better than the other because they don't compete.
If you could afford it all you should get it all but most of us cannot afford everything.
You need to consider whether you need cover for being unable to work or whether you want to cover seriious illnesses (which may or may not co-incide with being able to work).
You need to consider the consequences for yourself if each event.
For example I don't have CI, but I would be willing to sell my home and downsize if I needed a lump sum, so apart for living in a smaller house, the financial consequences are not serious for me.
There is no black and white because the consequences for different people are differnt.
For example some people need to provide child care and others don't.
Some people could live with aprents in an emergency, other can't because they are either dead or unable to care for someone else.
So it reaolly does have to depend on your own circumstances.
Personally I put CI further down the list.
I'm not saying it doesn't have a role, but it's possible you might have an illness, not be able to work and be unable to claim whereas PHI covers you if you CANNOT WORK, so it covers the risk, not something (getting an illness) which is not necessarily related to financial risk.
Purely my own opinons and I am not an advisor.0 -
True, L&G for example (biggest provider of term ssurance) paid out 93% of claims in 2008. Some are lower as you can see in the link I provided above. You don't need to be an adviser to have access to these statistics, a google search will provide it.Not all companies selling CI cover pay out on 90% of their claims, although a good reputable adviser should know the figures for the companies they recommend.
Not so, you didn't check the figures did you? In all bar 2 cases, not meeting the definition was the main reason for delcline of claim. In terms of getting advice, yes always the best option. Make sure it's good advice though, I've known advisers 'advise' applicants not to disclose certain material facts that would definately affect a claim. It's not rocket science, there are no 'trick' questions, it's simply a case of telling the truth and answering the application questions accurately.most invalid claims occur due to incorrect completion of applications, leading to missing out important facts. For that reason I'd always recommend getting advice - the adviser should help complete the paperwork.0 -
Oshayaway - How patronising? I don't think you'd want to get into an argument with me about my figures....
'True, L&G for example (biggest provider of term ssurance) paid out 93% of claims in 2008.'
92.8% actually. Of the 7.2% that weren't paid, the majority were for non-disclosure.
'Not so, you didn't check the figures did you?'
Oh dear - I think I know them pretty well since I deliver presentations on them most days.0 -
Oshayaway - How patronising? I don't think you'd want to get into an argument with me about my figures....
You are quite right, that did come across quite patronising, well done for pointing that out.
I don't mind arguing if I'm right... which I am (the word you're looking for is conceited).
'True, L&G for example (biggest provider of term assurance) paid out 93% of claims in 2008.'
Lol, my bad! If you want to split hairs the exact figure is 92.844365% Is that enough decimal points for you?92.8% actually. Of the 7.2% that weren't paid, the majority were for non-disclosure.
As for the non disclosure ratio, what I said is correct “In all bar 2 cases, not meeting the definition was the main reason for decline of claim.” L&G is one of the two (4.2% non disclosure; 3% not meeting definition - more decimal points available on request
). Therefore, your comment “most invalid claims occur due to incorrect completion of applications” is not correct.Oh dear - I think I know them pretty well since I deliver presentations on them most days.
Apparently not, the figures speak for themselves. In which case shouldn’t you be getting this stuff right?0 -
Let's wait until the 2009 stats are published....0
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Let's wait until the 2009 stats are published....
Bright Grey published their 2009 claim stats this week, of which 93% paid out. Only 2% declined due to non disclosure so they are following the same trend. Interesting as that is a big improvement on their 2008 stats.
The other provider's figures should be out shortly.0 -
Why don't you start another thread to discuss stats?
The OP should chose their insurance on the basis of need, risk and consequences for their circumstance, not on which one pays out on the most claims.
Some of you clearly have an axe to grind and find that more important than helping the OP.0 -
I agree. I'm new to this site and got drawn into an irrelevant debate by the resident nitpicking spod! Apologies to you all (particularly the OP) for that.
I still stand by my initial post, and would say that CIC is a valuable part of an insurance portfolio. Not right for everyone but should be considered, especially by anyone with dependants. For many people the financial effects of suffering a CI are more devastating than if the sufferer had died.
It's arguable that redundancy cover would be a major priority for self-employed, but income protection would be a signifcant consideration.
Good advisers would know these things and will give the right advice about the different types of cover available.0 -
Lisyloo is right. PHI can pay out for any condition that prevents you from working, whereas Critical Illness will only pay out for defined conditions - that is why CI has a lower payout rate.
It is a "sexier" insurance because it will pay a lump sum as a one off but if you are relying on it and are not "fortunate" enough to get the right illness you are stuck.
If I was asked to defend a complaint that somebody took out PHI in preference to CI, I would find it far easier than one the other way round. It won't make you rich if you claim but it will do its job if you can't do yours.
On that point - some policies will pay out if you can't do your own occupation and others if you can't do any work to which you are suited so do check before buying.
Similarly, check how long after falling ill before it starts paying out. Try to match it with what an employer might pay (not if you are S/E of course) or what reserve funds you hold, and think about how long you want the policy to run and what inflation-proofing you should have.0
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