Critical Illness Insurance

auoq86

I am currently considering changing my CI policy and would appreciate your comments.
I have a current policy, with around £90k of cover, which I pay £15pm for. As it was taken out some 6 years ago, I am told that the newer policies offer more cover - around 38 illnesses instead of the 27 or so I have covered.

I have been recommended to take out a new policy, with a similar amount insured (£90-100k), but to also keep my current policy. The new policy would include life cover to the same value, although I can see no benefit of this to me personally (I am single, no dependents, mid 30's, mortgage hopefully cleared within 5 years). I am told that premium wise, it would work out about the same with or without the life cover.

I am a little overwhelmed with the advice at the moment, and also surprised at the size of the premium quoted - around £45per month (in addition to the current policy). Any comments from the wise on this forum?!

dunstonh

I am told that the newer policies offer more cover - around 38 illnesses instead of the 27 or so I have covered.

Actually they tend to offer less. However, if you are comparing a budget plan against a comprehensive plan, then there would be differences. You also have provider differences as well with some offering wider coverage than others.

I am a little overwhelmed with the advice at the moment, and also surprised at the size of the premium quoted - around £45per month (in addition to the current policy). Any comments from the wise on this forum?!

CI gets more expensive as you get older, quite quickly. So 6 years difference in age can make a big difference. Also, as mentioned, CI cover is not like for like across the board and there are some big differences between providers. You also have reviewable and guaranteed premiums to take into account.

auoq86

Thanks for the reply.

I think the difficulty in comparing what I have now with what is available is what is overwhelming me at the moment. Is there an easy way to do this, or is it just getting the current policy (which I have) and comparing the T&C's (if it makes any difference the exisitng policy is Scot Prov, the new one with BUPA).

Also, do you have any comments re the Life Cover element? Are premiums really about the same with and without the life cover? I don't see the point in paying for the Life Cover element when I can't see any need for it in my personal circumstances!

Thanks for your help, its much appreciated.

jasonking

I would be very wary of changing an existing CI policy as the definitions have changed in the last few years and you run the risk of cancelling a policy and the contracting an illness that isnt covered under the new plan but was under the old one! Most of the changes we have seen have been a tightening of the definition (making it harder to claim overall) but that isnt the case accross the board as some newer definitions have also been introduced. Premiums have also risen quite sharply as you have seen!

For example angioplasty (balloon) has been removed or severly tightened up by most insurers plans as one of the critical illneses whereas I suspect yours will still cover this. You are risking the difference between a payout and no payout if you change. Some newer conditions are now included that weren't 6 years ago but as you can imagine there is competition amongst insurers to say that they have the most CI definitions so it is a grey area to say the least. This is why your existing adviser is recommending you keep your existing plan and add to it, rather than replace your existing cover...you are then covering as many bases as possible.

It is a peverse fact that when you include life cover as well it is the same price or even cheaper than just buying CI cover. This is because few people buy stand alone CI cover, so fewer insurers offer it, which means a less competitive market and therefore highher premiums.

Good luck and get the T&C's like you say

jasonking

Just also thought...do you have Income Protection/Permanent Health Insurance cover? if not then that might be worth considering. It pays an income indefinitely whilst you are off sick for whatever reason so in many respects is more comprehensive cover that CI. Dont confuse it witH ASU/MPPI cover though

auoq86

Thanks for the thought! I am also looking at IP/PHI at the moment - I did have some until about 18 months ago, when I suspended the policy due to being made redundant and having no job. I am not back in employment and am thinking about restarting it - I seem to remember that I could suspend it for 2 years, but I may have imagined that (need to check). I was given a quote for PHI at the same time, and again it seemed to be a lot more than I was expecting. Guess I need to accept I'm not getting any younger!!:rotfl: