Income protection insurance and critical illness insurance

AlisonHarrison

My husband is 56 and works for the health service. He is due to get his pension at age 60. He wants to work until at least age 65 (or normal state retirement age)
Two parts to this question.
1. If he takes out income protection insurance, can he specify a retirement age, rather than have it until he is 60. Obviously it is not worth it if he would only get it until age 60.
2. If he takes out critical illness, will the "illnesses" be covered after retirement age? So if he has a stroke at age 80, would he be covered? Also if the illness is TPD would the "normal" retirement age be 60 or would it be "normal state pension age"

He would like £3,000 worth of income protection and £100,000 critical illness.

dunstonh

1. If he takes out income protection insurance, can he specify a retirement age, rather than have it until he is 60.

yes, you can take out permanent health insurance to age 65.

2. If he takes out critical illness, will the "illnesses" be covered after retirement age? So if he has a stroke at age 80, would he be covered? Also if the illness is TPD would the "normal" retirement age be 60 or would it be "normal state pension age"

he will be covered during the period of the policy that it is in force. So, if its taken out for 5 years, it will cover that 5 year period. replace 5 with 10,15 or whatever number of years you choose.

AlisonHarrison

Thanks DustonH for this helpful advice. It was very clear.

Do you have any idea of the cost of this?

I note the you are a financial advisor, do you have a preferred insurer, or are they much of a muchness.

I have had great difficulty with my own insurer recently. I had income protection and critical illness. They were a nightmare. (GRE)
Two complaints to the FOS and they lost both of them.

dunstonh

Do you have any idea of the cost of this?

not off the top of my head. Health, occupation, smoker status, deferment period, term and quality of cover will all have an impact. It wont be cheap though. I suspect it will be too expensive.

I note the you are a financial advisor, do you have a preferred insurer, or are they much of a muchness.

I'm mostly an investment IFA but there is no such thing as one best option. Typically, you have to compromise on cost and cover and that can often be what decides which provider it is best to go to.

magpiecottage

Bear in mind too that NHS employees get good ill health benefits. Off the top of my head, I think it is up to six months full pay then six months half pay.

If he had to give up work permanently then there is the option for an immediate pension which would have an impact on the maximum payable on an income protection policy and possibly reduce it to zero.

CI definitions can also be affected as you get older.